Australian Stock Market Report – Midday 6/28/13

MID-SESSION REPORT

(12.30pm AEST)

Investors and traders aren't overly motivated to buy or offload equities on the final trading session of this financial year. The All Ordinaries Index (XAO) is up just 0.1 per cent. On a positive note, we've just had the best two run of 2013, with the XAO up 3.2 per cent on Wednesday and Thursday combined.

Last night, global markets rose impressively, with the DOW up 0.75 per cent while many of the major players in Europe were up by at least 0.5 per cent.

Two Federal Reserve officials (US equivalent of Australia's Reserve Bank) settled nerves that the central bank is unlikely to be reckless in its slowing of stimulus. Any slowing in quantitative easing is going to need to be driven by improving economic conditions. Despite some strong economic readings overnight, this week has been mixed on that front. 30-year fixed rate mortgages in the US have recorded one of the fastest weekly jumps in around 25 years.

The miners have turned positive after a tough start, with a 1.4 per cent improvement for Rio Tinto (RIO) one of the drivers. The larger BHP Billiton (BHP) is down 0.3 per cent, while Fortescue Metals (FMG) is 0.8 per cent lower.

The price of gold has slumped by 28 per cent so far this calendar year, which is squeezing margins for the precious metal producers. Newcrest Mining (NCM) is down 0.7 per cent or 7 cents to $9.82. Kingsgate (KCN) is down 7.7 per cent after saying that a $300 million write-down is likely at its Challenger mine in South Australia.

Today is the final day of the financial year and the local sharemarket fall somewhere in the middle in relation to global performance. The XAO has improved by around 15.5 per cent over the past 12 months, while the US Dow is up 16.5 per cent. Across the region, Japan's Nikkei is up 45 per cent and has been the region's big winner. In Europe, Germany's DAX has been the standout, improving by around 25 per cent.

The Australian dollar has eased overnight and buys US92.5 cents, compared to US102.5 cents at the start of the financial year.

At lunch, 984 million shares have changed hands, worth $4.4 billion. 409 stocks are higher, 470 are in the red and 358 are unchanged.

[Kick off your trading day with our newsletter]