Australian Stock Market Report – Midday 6/7/13

MID-SESSION REPORT

(12.30pm AEST)

The Australian sharemarket is sliding for the third straight day, with the ASX200 Index down by close to 1 per cent at lunch. This is adding to the back to back 1 per cent falls on Wednesday and Thursday. Investors are feeling somewhat jittery ahead of a non-farm payrolls report out later tonight, in addition to the closure of the Aussie market on Monday due to a public holiday.

US markets ended higher last night, with fewer Americans filing for unemployment benefits for the first time last week. It was a very different story in Europe however, with stocks falling between 1-2 per cent across major markets. Both the European Central Bank (ECB) and Bank of England (BoE) decided to keep interest rates on hold at 0.5 per cent.

The mining sector is the biggest drag so far, with both BHP Billiton (BHP) and Rio Tinto (RIOP) sliding by around 2 per cent for much of the session. Gold producer Newcrest Mining (NCM) is the worst of the majors, with its share price down 8.94 per cent after 2.5 hours of trade. NCM is expected to cut jobs by scaling back operations in Brisbane to reduce costs and increase efficiencies. A final dividend is not likely to be paid; making it the first time since 2009 that only one dividend is distributed over a year.

Oil and gas producer, Santos (STO) said it discovered natural gas through an exploration well in Australia's Browse Basin in Western Australia. STO has been improving for much of the session, however is now trading in the red by 0.28 per cent.

The major banks are mostly lower, with Westpac (WBC) the exception as it edges higher by 0.6 per cent. Commonwealth (CBA) and National Bank (NAB) are both down by close to 0.9 per cent.

This has been an eventful week, with plenty of economic data issued over the past four sessions. The Reserve Bank (RBA) decided as expected to keep rates at 2.75 per cent, retail spending rose by just 0.2 per cent, China's manufacturing sector continued to disappoint, Australia recorded a smaller than forecast expansion in its GDP while a $28 million trade surplus was posted in April.

At lunch, 716 million shares have exchanged hands, worth $2.4 billion.323 stocks are higher, 432 are in the red and 296 are unchanged.

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