Australian Stock Market Report – Midday 8/6/2012

LUNCHTIME REPORT
(12.30pm AEST)

The Australian share market has kick started the trading week on a positive note, thanks to strong jobs numbers out of the US on Friday. 163,000 jobs were created in the US economy in July, above expectations. The jobs numbers saw European shares hit a four month high on Friday night, while US stocks were also propelled. Locally, the All Ordinaries Index (XAO) is up 49.7pts or 1.2pct at lunchtime in the East to 4292.7pts.

It is a Bank Holiday in NSW and the ACT so trading volumes are quite low, with 490 million shares having changed hands by Midday in the East.

Iron ore miner Fortescue Metals Group (FMG) is one of the stand-out performers, up 2.6pct to $4.29 after securing US$1.5 billion in funding to expand its flagship iron ore facility in Western Australia's Pilbara region.

Elsewhere, hearing implant maker Cochlear (COH) has risen 2.3pct to $66.28 ahead of the release of its full year earnings tomorrow. August Reporting Season officially kicks off tomorrow, with analysts expecting COH to release a net profit after tax of $160 million. Other big name companies such as Rio Tinto (RIO) and Telstra (TLS) report later this week.

The TD-Securities Monthly Inflation Gauge shows inflation remains tame in Australia. The gauge rose just 0.2pct in July, for an annual read of 1.5pct. CommSec expects the Reserve bank will leave rates on hold at 3.5pct when it meets tomorrow.

The Aussie dollar is buying US105.62c, £0.676 and €85.17c.

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