Australian Stock Market Report – Midday 7/8/13

MID-SESSION REPORT
(12.30pm AEST)

Australian shares kicked off the week in the red, only to rise by around 0.3 per cent in early trade, trade flat at one point and then shoot lower by lunch. The All Ordinaries Index (XAO) is now down by 0.8 per cent, after a 1 per cent improvement recorded over the previous week.

The mining sector is the biggest culprit for the day's losses, with the recent strength of the greenback pushing commodity prices lower. On Friday night, an hour before the open of US trade, a better than expected non-farm payrolls report was issued. According to the data, 195,000 jobs were added in June, around 25,000-30,000 more than most economist expectations. The unemployment rate is at 7.6 per cent.

Our two largest resource stocks, BHP Billiton (BHP) and Rio Tinto (RIO) are both down by around 2.3 per cent, while gold miner, Newcrest Mining (NCM) is down by 8.6 per cent. The Australian Securities and Investments Commission (ASIC) is supposedly investing analysts' briefings leading into the August reporting season, after launching an investigation of NCM's disclosure of a $6 billion writedown announced in early June.

The major banks kicked off the day mostly stronger; however the big four are now trading firmly in the red. The defensive telcos (essentially Telstra) is up 0.2 per cent, Billabong (BBG) is up 13.4 per cent while Harvey Norman (HVN) and Myer are both higher.

On the economic front this morning, the latest job advertisement report was issued by ANZ. Job ads fell by 1.8 per cent in June, with internet ads falling most significantly. In recent years, this has not been an accurate measure of employment changes due to businesses changing their recruitment strategies (more of a focus on social media and sites such as LinkedIn).

This week locally, a monthly jobs report will be the highlight on Thursday. Across the region, inflation data in China and a meeting by the Bank of Japan will be looked at closely. European leaders will be meeting in Brussels tonight and in the US, the FOMC Minutes, consumer confidence and the second quarter earnings season will kick off this week.

At lunch, 666m shares have changed hands, worth $1.3bn. 336 stocks are higher, 355 are in the red and 266 are unchanged.

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