Australian Stock Market Report – Midday 7/5/2012

MIDDAY REPORT
(12pm AEST)

The local share market is trading virtually flat at lunchtime in the East, on low volumes. Investors haven't been given a lot of guidance with Wall Street closed overnight for the Independence Day holiday and many treading water ahead of the European Central Bank's rate decision tonight, where it's tipped rates could be cut to a record low of 0.75pct. At lunchtime in the East, the All Ordinaries Index (XAO) is down 10.4pts or 0.2pct to 4203.4.

One of the best performers on the market is Flight Centre (FLT). The travel agent has defied the downturn in consumer spending, by upgrading its full year profit guidance. FLT now expected FY profit to June 30 to come in between $280-$295 million, up 18pct on last year's result. FLT will also move to increase its workforce by 8-10pct, through hiring 1000 new sales consultants. At lunchtime in the East, FLT shares are up 6pct to $20.40 after hitting an earlier high of $20.96.

Airline stocks are also seeing solid support today. Qantas (QAN) shares are up 3pct to $1.1325 while Virgin Australia (VAH) is firmer by 1.3pct to $0.38.

Big name companies trading in the red include Newcrest Mining (NCM), Oilsearch (OSH) and Macquarie Group (MQG).

In economic news today, Australia´s trade deficit widened in May, according to official data from the Bureau of Statistics. The balance on goods and services was a deficit of $285 million in May, seasonally adjusted, compared with a upwardly revised
deficit of $26 million in April. During May, exports were up 2pct in adjusted terms while imports were up 3pct.

The Australian dollar is a little weaker at lunchtime in the East, buying US102.54c. It's also worth £0.6577 and €81.81c.

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