Australian Stock Market Report – Midday 6/22/2012

LUNCHTIME REPORT
(12pm AEST)

The Australian share market remains under pressure today, but fortunately isn't falling as hard as futures markets had predicted following a sell-off on global markets overnight. European and US markets fell in response to downbeat economic data out of America and China. After the bell, ratings agency Moody's downgraded 15 global banks adding to the negative sentiment. At lunchtime in the East, the All Ordinaries Index (XAO) is weaker by 43.1pts or 1pct to 4133.7.

Mining and energy stocks are coming under the most pressure following a sharp sell-off in commodities overnight. The Toronto Composite fell 3pct which is a significant indication for our market, as it's also heavily exposed to resource stocks. Shares in index leader BHP Billiton (BHP) are lower by 2.2pct at lunchtime to $31.48 while Rio Tinto (RIO) is weaker by 1.7pct to $55.91.

In the retail space, Myer Limited (MYR) has fallen to a fresh all-time low today, down 0.6pct to $1.675 however CEO Bernie Brooke remains defiant the company will weather the retail slowdown.

Qantas (QAN) shares have fallen a further 1.5pct to $1.1225, with the airline expressing concern that the expansion of Etihad Airways will have a severe impact on its operations. Etihad has a 4pct stake in Virgin Australia (VAH) and is said to be looking at increasing that to 10pct. Shadow Treasurer Joe Hockey has come out today saying Qantas won't go under but needs to make tough choices about its future. VAH shares are down 2pct to $0.3825.

An interesting fact for Friday: The Venezuelan share market has risen by 214pct over the past 12 months, while the Dow Jones index has gained 3pct in the same period. The Australian share market meanwhile has fallen almost 11pct in 12 months.

At 12pm AEST the Aussie is buying US100.55c, £0.6442 and €80.07c.

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