Australian Stock Market Report – Midday 8/8/13

MID-SESSION REPORT
(12.15pm AEST)

The Australian share market is rebounding from yesterday's falls, thanks to a strong result from Australia's largest telco Telstra (TLS) and as the unemployment rate remained steady at 5.7 per cent in July.

Overnight, US and European markets were generally weaker as investors started to speculate when the US and UK Central banks may start to wind back stimulus. New Bank of England Governor Mark Carney hinted rates in the UK could rise if unemployment falls to 7 per cent in Britain.

TLS has today reported a 12.9 per cent increase in FY13 profit to US$3.9 billion, with revenue boosted by strong sales of smartphones. Revenue rose 1.9 per cent to $26 billion, in line with Telstra's own forecasts of single digit growth. TLS expects single digit revenue growth in FY14 and committed to its final dividend payment of 14c per share, taking total dividend payments to 28c. TLS shares are up 1.5 per cent in the early session to $5.085.

Mining giant Rio Tinto (RIO) is due to report its first half numbers this afternoon. The fluctuating price of iron ore is expected to be mentioned in RIO's report. After falling substantially during yesterday's session and by 1.5 per cent in London, RIO is up 0.3 per cent at lunch to $58.78.

Financial stocks are making a comeback today, with the sector up 0.8 per cent.

Australia's jobless rate remained steady in July at 5.7 per cent. 10,200 jobs were lost in the month while the participation rate fell to 65.1 per cent. Hours worked rose, meaning that employers were receiving more labour from their current workers, reducing the need to hire.

The Australian dollar eased as the unemployment rate remained steady. The Aussie had been buying US90.3c early this morning but is worth US89.97c at lunchtime in the East.

So far on the market, 604 million shares have changed hands, worth $1.5 billion. 414 are up, 250 are down and 278 are unchanged.

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