Australian Stock Market Report – Midday 8/7/13

MID-SESSION REPORT
(12.30pm (AEST)

The Australian sharemarket is in the red, with the All Ordinaries Index (XAO) down by 1.1 per cent. This is the longest losing streak for local shares since late June this year. The index is down by around 1.3 per cent since the start of this week.

This shouldn't come as a huge surprise however, with global markets struggling overnight. The US Dow fell by 0.6 per cent while many of the major European markets fell by at least 0.25 per cent. Germany's DAX index slumped by 1.17 per cent. Talks from two Federal Reserve officials offered little new insight into the timing of a potential reduction in stimulus overnight.

The profit reporting season started to gain some traction yesterday, with inner ear implant maker, Cochlear (COH) announcing a 133 per cent rise in full year profit. COH shares are up 0.27 per cent.

Today, we've heard from 21st Century Fox (FOX) in addition to receiving minimal information from New News Corp (NNC). FOX looks after the entertainment arm of the previously listed Newscorp (NWS) while NNC looks after its publishing arm together with Fox Sports Australia. FOX's revenue jumped by 16 per cent over the fourth quarter. Strong growth in its cable division has been a key driver, while most other units declined.

Write-downs, one-off costs and a lack of information on its operation performance make providing insights challenging for NNC. NNC´s quarterly results were included in the $1.3b ´´loss from discontinued operations´´ line in its Profit & Loss statement; however this wasn't broken down and attributed to anything specific. More details should be provided in a future securities filing (announcement) by NNC. The pay-off of data behind a paywall is still not clear. NNC is around 11 times smaller than FOX.NNC shares are up 19.8% since June 20.

The mining sector is the biggest drag at lunch, with BHP Billiton (BHP) down 1.88 per cent while the smaller Rio Tinto (RIO) is 1.6 per cent lower. The number of home loans for owner occupier properties rose by a more than expected 2.7 per cent in June.

826 million shares have been traded so far, worth $1.98 billion. 266 stocks are up, 522 down and 254 in the red.

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