Australian Stock Market Report – Midday 8/26/13

MID-SESSION REPORT
(12.45pm AEST)

The Australian sharemarket has been modestly higher this morning, with the All Ordinaries Index (XAO) up 0.1 per cent at lunch. The XAO is trading above the 5100.0pt mark once again; something which has only happened a handful of times over the past two months.

Speculation that the Federal Reserve may delay the tapering of its substantial stimulus measures for the time being, was supportive for markets on Friday. Economic news fell short of expectations on the housing front.

One of the more important annual meetings in the finance world - the Jackson Hole Symposium took place over the weekend. Three of the most influential central bankers were not present. Ben Bernanke (head of the US central bank), Mario Draghi (big boss of the European Central Bank) and Mark Carney (new leader of the Bank of England) did not attend. This was the first time since 1987 that the chairman of the Federal Reserve was absent.

Weakness amongst the industrials and energy stocks is holding the market back somewhat. A rise in the gold price on Friday due to a weaker greenback is helping the miners of the precious metals. Newcrest Mining (NCM) is up 6.8 per cent (its best daily improvement in a fortnight).

Week four of the profit reporting season has started, with drilling services company, Boart Longyear (BLY) and oil refinery, Caltex (CTX) are two of the bigger names to issue numbers. BLY is down 9.9% after recording a US$329.4m half year loss. A reduction in drilling services demand was a drag and triggered 2800 job cuts this calendar year.

Caltex is down 1.3 per cent, despite the oil refiner announcing a 17 per cent rise in after tax profit to $195m. A 17cps full franked dividend has been announced; with a pay date of 2 October. A $35m foreign exchange loss over the year held back the result.

Suncorp (SUN), Woodside Petroleum (WPL) and WorleyParsons (WOR) have all gone ex-dividend today - one of the reasons for their losses on the market today.

At lunch, 874.7 million shares have changed hands, worth $1.74 billion. 482 stocks are higher, 340 are in the red and 288 are unchanged.

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