Australian Stock Market Report

Lunchtime Report
(1.10pm AEST)

The Australian share market started off stronger this morning up 23 points after a strong close on Wall Street on Friday. The US markets closed higher for the 5th straight week and European markets closed just off recent highs. The volumes traded on the overseas markets were still quite low and are expected to stay that way throughout this week as most major European official departments will remain closed until the 20th of August this year. The All Ordinaries Index (XAO) held on to an 17 point gain by lunchtime at 4302.8.

Almost all sectors moved higher, the only real areas of weakness were the property and healthcare sectors.
The miners were higher up 1.27% helped by a strong result from Newcrest mining Limited (NCM) Australia's largest gold miner and news of a new joint venture in the global steel market helping lift BlueScope Steel Limited's (BSL) share price in early trade.

Newcrest posted a 23% lift in Statutory Profit to $1.1Billion, helped by the sales of assets Queensland over the year as well slightly higher Expected realised gold price for the 2012 full year of $1,609 per ounce, up 17%. NCM share price lifted nearly 4% to $25.31. Smaller rivals in the gold space St Barbara Limited (SBM) added 1.1% and Regis Resources Limited (RRL) also higher up 2.8%.

Major mining stocks BHP Billiton Limited (BHP) lifted another 1% to $33.01 and Rio Tinto Limited (RIO) slightly higher up 0.34%. This morning Bluescope Steel announced the sale of 50% of its Asian and North American coated-steel businesses to Nippon Steel for US$540 million after tax and costs. The sale will allow BSL to free up cash to pay down debt and for other projects. And BSL will now have an ongoing alliance with Nippon and gain exposure to the growing markets in Asia. Bluescope shares rallied over 48% in early trade and by lunch the share prices was still up 30.77% to $0.34.

Our four major banks were all higher in early trade Commmonwealth Bank (CBA) added 0.19% to $56.04, Westpac Banking Corp. (WBC) up by 0.3% to $23.68 and National Bank (NAB) up 0.20%. Westfield Group (WDC) off 2.52% to $9.68 after going ex-dividend this morning, which accounted for most of the shares losses.

On the profit reporting front today we have had mixed results. Engineering and infrastructure management service firm, Downer EDI (DOW) reported its Full Year Net Profit up 17% to %195.2 million. Its mining division listed earnings in-line with expectations and its Rail division also was inline, helped by Gov´t funds for NSW Waratah train project. DOW share price lifted, up 10%.

James Hardie (JHX) first quarter Net Operating Profit up 11% to US$43.8 Million the company said looking towards recovery in US housing market, but the Aussie Market is set for more weakness. And Hardies expects the New Zealand market will also be subdued. James Hardie did say it is now expecting to post a Full Year operating profit US$140-156Million. JHX shares off 4.4% to $7.90.

Telstra (TLS), flat at $3.76 a share and AGL Energy Limited (AGK) under pressure off 0.58% to $15.30. Our major food and drink retailers were higher, Woolworths Limited (WOW) up 0.6% to $28.28 and Wesfarmers Limited (WES) up 1% to $32.61 and Coca-Cola Amatil Limited (CCL) up 1.5% to $13.46.
At lunchtime in the East, the Aussie is buying US105.62c, €85.91c and £0.6740.

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