Australian Stock Market Report – Midday 6/26/2012

LUNCHTIME REPORT
(12.55pm AEST)

Yesterday the local market closed lower, The All Ordinaries Index (XAO) lost 22 points to 4,072points.

More negative news out of Europe took its toll on global markets overnight. European markets hit by news that Spanish leaders had formally requested financial aid for its ailing banking system from the European Union but at this stage we still do not know exactly how much cash will be needed. The expectations in the market range from €68 billion to €100 billion. Overnight the Spanish market (Madrid IBEX) closed down 252 points or 3.67%.

Adding to the concerns overnight Cyprus became the 5th Eurozone nation to ask for a bailout, the Cypriote economy has been heavily hit by its exposure to the Greece banking and property sectors. US stocks fell and the Australian market was expected to open down over 35 points.

This morning the Australian market has opened lower but is holding up much better than many had expected. At lunchtime in the East, the All Ordinaries Index (XAO) is weaker by 16 points to 4,056.

The S&P/ASX 200 Consumer Discretionary Sector in focus today as all eyes were turned, once again, on the media sub sector. Today Seven West Media Limited (SWM) told the market that Chief Executive Officer (CEO) Mr David Leckie will leave Seven West Media and take up a new role and as an executive director of Media, at Seven Group Holdings Limited (SVW). Mr Leckie will be replaced by ex-CEO of Woodside Petroleum Limited (WPL) Don Voelte. Seven Media shares fell over 9.9% to $1.78 while Seven Groups share price also lost ground, off 1.95% to $7.55.

On other media news, the latest capital raising by the Ten Network (TEN) has seen shareholders Gina Rinehart and Lachlan Murdoch increasing their holdings. Gina Rinehart now holds a 10.6% stake in TEN while Lachlan Murdoch owns around 9%. TEN's share price lost 0.97% to $0.51 and media rival News Corporation (NWS) fell 0.69% to $20.16. APN News & Media Limited (APN) now lower off 4.4% to $0.65 and Southern Cross Media Group Limited (SXL) off nearly 2%.

S&P/ASX 200 Energy sector lost ground off 0.76% after the oil price fell back below US$80 a barrel overnight. Woodside Petroleum Limited (WPL) fell 1.3% or 42 cents to $31.10 while Santos Limited (STO) fell 1.2% to $11.09.

The US$ gold price was higher overnight, lifting to US$1,585 an ounce. Newcrest Mining Limited (NCM) only slightly lower off 0.4% to $22.33. Alacer Gold Corp. (AQG) up slightly to $5.50 and Kingsgate Consolidated Limited (KCN) off nearly 1% to $4.98.

Australia's largest miner, BHP Billiton (BHP) fell 1.7% to $30.96. RIO dropped by 0.94% to $55.38 and Fortescue Metals Group´s (FMG) founder and chairman Andrew Forrest today announced he has lifted his stake in the company buying another $62 million worth of shares. FMG now only slightly lower off 0.2% to $4.84, with Atlas Iron Limited (AGO) off 0.13% to $1.96.

PaperlinX (PPX) today announced it expects to report a loss of $171 million for the 2012 financial year. PaperlinX is another Australian based company hit by tough trading conditions, falling margins as its competitors can produce as a much lower per unit price. PaperlinX also hit by restructuring charges and losses on the sale of its overseas operations. PPX share price flat in early trade.

The S&P/ASX 200 Financials sector fell over 0.37% with the big four banks are all lower. National Australia Bank Limited (NAB) lost 0.35% or 7 cents to $23.09. ANZ Banking Group (ANZ) fell 0.69% to $21.18, Westpac Banking Corporation (WBC) fell 0.77% to $20.49 while Commonwealth Bank of Australia (CBA) eased 0.16% to $51.63.

At 12.55pm AEST the Aussie is buying US100.31c and €80.12c.

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