Australian Stock Market Report – Midday 6/4/2012

LUNCHTIME REPORT
(12.45pm AEST)

It's been a terrible start to the trading week, following big slides on US and European equity markets on Friday night. A key European manufacturing gauge came in lower than expected, sending Germany's DAX Index down 3.4pct, while a weak jobs report out of the US saw the Dow Jones index slump almost 275 points. Only 69,000 jobs were created in the US in May, versus expectations of job gains of 150,000. Locally, the Australian share market continues to be sold off with the All Ordinaries Index (XAO) down 68.6pts or 1.7pct to 4048.3. The ASX 200 Index (XJO) has fallen below the 4000 point for the first time since November.

Energy stocks are among the biggest losers, after the price of crude oil eased to an eight month low on Friday. The Nymex contract is now holding around US$83 a barrel. Shares in Oilsearch (OSH) are down 3pct to $6.50 while Santos (STO) has fallen 2.8pct to $11.40.

Rio Tinto (RIO) has slumped by 3.3pct to $53.70 while index leader BHP Billiton (BHP) is off 1.9pct to $31.15. However gold stocks are enjoying support with investors once again fleeing to the safe haven precious metal. Gold added 3.7pct on Friday night to US$1620.50 an ounce. Shares in Australia's largest listed gold producer Newcrest Mining (NCM) are firmer by 3.6pct to $24.97 while Oceana Gold (OGC) has firmed by 9pct to $1.945 and Anglo-Gold Ashanti (AGG) is up 3.5pct to $7.46.

The Australian dollar remains subdued against the greenback, and fell to eight month lows of US95.85c on Friday during New York trade. At lunchtime in the East, the AUD is buying US96.55c, £0.6286 and €77.87c.

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