Australian Stock Market Report – Midday 9/11/13

MID-SESSION REPORT
(12.30pm AEST)

The Australian sharemarket is improving for the fourth straight day, the third consecutive month and both the ASX200 together with the All Ordinaries are above 5200pts. Should markets continue to rise a touch more, stocks could reach five year highs.

We shouldn't be too surprised however; with US stocks enjoying their longest winning streak since July while European equities are at their best levels since May. Solid economic news in China since Sunday, a reduced likelihood of an imminent strike in Syria and less (likely to be) QE tapering than previously expected has been helping markets.

The mining stocks are up around 2.5 per cent this week and 0.8 per cent at lunch. BHP Billiton (BHP) is up 0.9 per cent, Rio Tinto (RIO) is 1.6 per cent higher while Fortescue (FMG) is 3.8 per cent firmer. Yesterday, industrial production (factory activity), retail spending and investment rose more than expected in China (our largest trading partner). China buys around 1/3 of Australia's exports.

Gold and energy stocks are falling however, with any potential strikes on Syria put on hold for the time being. Russia is working on a plan to put Syria's chemical weapons under international control. Obama addressed the nation (US) this morning and asked congress to delay a vote on whether to authorise military strikes. He said that a diplomatic solution is 'possible'.

The latest consumer confidence reading rose by a solid 4.7 per cent in September; the best reading since December 2010. The survey was conducted over the four days to 8 September - further signs that Australians reacted positively to the Federal Election outcome. Yesterday, business confidence also rose. Should the confidence levels continue to improve, this 'should' translate (all else remaining equal) in increased business investment and consumer spending at the retail level.

At lunch, 987.9 million shares have changed hands, worth $2.07 billion. 437 stocks are higher, 354 are lower and 288 are unchanged.

[Kick off your trading day with our newsletter]