Australian Stock Market Report – Midday 7/24/13

MID-SESSION REPORT
(12.30pm AEST)

The Australian sharemarket was up 0.7 per cent at one point, only to have most of the gains wiped out following worse than expected Chinese data at 11.45am (AEST). This is the third consecutive session of improvement, while both the All Ordinaries Index (XAO) and the ASX200 (XJO) still remaining above the 5000.0 point mark. The XAO is up 0.2 per cent.

HSBC's Flash Manufacturing PMI reading today fell from a previous 48.2 to 47.7. A number below 50.0 indicates industry contraction. This reduced the mining sector's gains in the past 45 minutes of trade. The industry was the star performer in the first hour of trade. BHP Billiton (BHP) is still up by around 0.6 per cent, while the iron ore focused, Rio Tinto (RIO) is 1.36 per cent higher. Gold producer Newcrest Mining (NCM) is up 0.79 per cent, taking the gains for the week to 14.2 per cent, party thanks to a stronger gold price.

15 minutes before the Chinese data, the June quarter CPI (consumer inflation) reading was issued. As expected, prices edged higher by just 0.4 per cent over the previous three months, taking inflation over the year to 2.4 per cent; in the middle of the Reserve Bank's 2-3 per cent target range. The market was pricing in a 70 per cent chance of a rate cut earlier this morning; however this pulled back to a 50/50 call in August.

The defensive telcos are doing best, with Australia's sixth biggest company, Telstra (TLS) up by 1.1 per cent.

The major banks are mostly higher, with National Australia Bank (NAB) unchanged, while the remaining big three are up by between 0.25 per cent and 0.6 per cent.

After the close of the US market this morning, Apple issued its latest quarterly profit result, which was better than most expectations. It recorded $35.3 billion worth of sales and sold 31.2 million iPhones between April and June. If Apple was listed on the Australian market, it would make up around 25 per cent of the ASX200 on its own.

At lunch, 782 million shares changed hands, worth $2.32. 472 stocks are higher, 335 in the red and 261 are flat.

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