Australian Stock Market Report – Midday 8/2/13

MID-SESSION REPORT
(12pm AEST)

Positive data out of the US lifted overseas stocks higher last night, providing a strong lead for local shares. The Dow Jones was up 128 points after the ISM manufacturing reading was higher than expected and lower initial jobless claims encouraged investors.

The All Ordinaries (XAO) jumped 48 points on the open, remaining close to 5100pts. Upbeat economic data from China and the US has helped our markets the last couple of days with an improvement of around 1.3 per cent so far this week. The All Ordinaries hasn't lost ground over a week since late June.

Energy and mining stocks are amongst the standouts thanks to gains in base metals and oil overnight. Heightened tensions in Libya have put upward pressure on oil prices while positive economic news out of China has led investors to believe demand for resources may improve. Despite weakness from our miners in offshore trade, BHP Billiton (BHP) shares are trading at 4 and a half month highs, up over 1 per cent.

Paladin Energy (PDN) shares are in a trading halt until Monday following an announcement that it has scrapped its planned joint venture and is now looking to raise funds through an institutional placement of shares. Paladin stocks are down 13.4 per cent this year.

Today Resmed (RMD) shares are up over 1.6 per cent after the company announced its full year results. The sleep apnoea equipment maker reported revenue of US$S414 million over the fourth quarter, up from US$371 million a year earlier. RMD has lifted its final dividend by 47 per cent to $0.25 per share. Shares in the company also rose 3.1 per cent yesterday in anticipation of a strong earnings result.

The market is waiting on further details surrounding speculation that a new bank levy on deposits will be introduced. Treasurer Chris Bowen and Finance Minister Penny Wong will release their anticipated economic statement at 1pm (AEST) today. The financial sector (XFJ) fell 0.8 per cent yesterday when rumours began circulating but have reversed those losses today with the index up 1% ahead of the announcement.

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