Australian Stock Market Report – Midday 8/8/2012

LUNCHTIME REPORT
(1pm AEST)

Overnight European and the US markets continued to mount solid gains as expectations increase over new central bank intervention in the markets. Concerns over global oil supply pushed oil prices higher and US banking stocks lifted. Shares in UK banking group Standard Chartered fell over 23% after New York banking regulators accused Standard of helping Iran avoid sanctions by concealing US$250 billion worth of transactions over the last 10 years. Standard management said the allegations were incorrect but the share price continued to slide.

After hours a strong result from Walt Disney Corp. saw its share price list 0.3%. Disney profit jumps 24% helped by strong returns from ´The Avengers´ movie leading the turnaround in its studio division.

This morning the local market opened higher up 20 points higher as investors bought into mining and energy stocks and sold out of telecommunication and utility stocks. By lunchtime The All Ordinaries Index (XAO) added 23 points to 4,336.

The best performing sector again this morning was the S&P/ASX 200 Energy Sector up 1.07%. The energy sector was helped by the lift in the US oil price overnight, with oil now sitting near a 3 week high back above US$93 a barrel. Overseas investors focussed on reports that North Sea oil output could fall to record lows by September, as well as heightened Middle East tensions. Oil Search Limited (OSH) listed solid gains in early trade up 0.8% to $7.09 while Santos Limited (STO) added 1% to $11.14. Woodside Petroleum Limited (WPL) gained 1.1% in early trade to $34.49 and Origin Energy Limited (ORG) lifted by 0.6%.

Base metals prices rose in London, helping to cement gains for our miners today. Index leader BHP Billiton (BHP) rose 0.6% to $32.35 while iron ore miner Fortescue Metals Group (FMG) was one of the better performers up another 1.8% to $4.48. Rio Tinto Limited (RIO) our second largest listed mining was firmer ahead of the release of its full year results just after the close of market today, RIO added another 0.2% to $54.98.

The S&P/ASX 200 Financials sector added over 1%, the big 4 banks higher boosted by the RBA rate decision yesterday and gains in US banking stocks overnight. Commonwealth Bank of Australia (CBA) up 1.6% to $57.75 and Australia and New Zealand Banking Group Limited (ANZ) added 0.6% to $23.84 while Westpac Banking Corporation (WBC) also added 1.3%. Insurance and property stocks also mixed with the best performer QBE Insurance Group Limited (QBE) up 1.74% to $14.62 and Insurance Australia Group Limited (IAG) up 1.87% to $3.81 and Suncorp Group Limited (SUN) lower in morning trade off 0.35%.

Global property development and investment management, Stockland today reported its Full financial year result till the end of 2012. Stockland's profit fell 35% year on year to $487 million. Stockland said the market conditions were tough especially in the property development sector it did record a lift in its distribution to shareholders up 1% to $0.24c per security. Stockland did say its Australian retail & retirement business is performing well. Stockland share price was down 3.67% to $3.28.

The world's largest share registry firm Computershare Limited (CPU) reported a slide in profit down 41%. Computershare said the market was hit by weak merger & acquisition activity. The firms adjusted Net Profit (NP) was in line with market expectations delivering a profit of US$272.8million. CPU share price rose 5% to $7.92.

Elsewhere, Telstra Corporation Limited (TLS) fell back below $4 a share in morning trade on broker downgrades and investors taking profit ahead of tomorrow's full year result release. The Telstra share price off 2.5% to $3.97 by lunchtime. Qantas Airways Limited (QAN) up 1.75% and energy provider, AGL Energy Limited (AGK) off 1.41%.

The Aussie dollar is buying US105.42c and €85.06c.

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