Australian Stock Market Report – Midday 7/2/13

MID-SESSION REPORT
(12.15pm AEST)

After a dismal start to the new financial year, the Australian share market is rebounding today on the back of positive offshore moves and ahead of the RBA's rate announcement this afternoon.

Overnight, US and European markets moved higher as investors positioned themselves at the start of a new quarter. It was a different story to Monday's trade on the Australian share market, which marked the worst start to a new financial year since 2009/10.

The RBA hands down its July rate decision at 2.30pm AEST. Money markets are pricing in less than a 20 per cent chance that interest rates will move from historic lows of 2.75 per cent and CommSec agrees that rates will remain on hold. The fall in the Aussie dollar in recent weeks has done a lot of the heavy lifting in terms of providing stimulus for the economy.

In company news, pallet provider Brambles (BXB) is rising after confirming it is spinning off its underperforming business management business Recall. BXB tried to sell Recall last year but the offers were too low. The spin-off is expected to raise BXB around $448M through the offering of new shares, with Brambles shareholders will receive new shares in Recall proportionate to their existing Brambles shares- while retaining existing BXB shares. BXB is firmer by 1.3 per cent to $9.195 at lunchtime in the East.

QBE Insurance (QBE) is up 2.6 per cent to $15.69 after announcing it 1H premium rate has increased in line with expectations at 5 per cent. QBE is today holding an investor briefing.

So far on the market, 583 million shares have changed hands, worth $1.67 billion. 531 are up, 187 are down and 261 are unchanged.

The Australian dollar is weaker at US92.18c. It is also buying £0.6061 and €70.61c.

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