Australian Stock Market Report – Midday 9/12/2012

LUNCHTIME REPORT
(12.30pm AEST)

What a switch on the markets this morning. Yesterday it was all about trading defensively and being safe ahead of some big ticket items that are due for release and resolution from overseas markets this week. But today it is all different.

We still do not have any outcome from the Germany high court on its vote on the future of the new Eurozone bailout fund, The European Stability Mechanism (ESM), or any news from the Federal Reserve. Our market and currency have opened higher following the US markets and commodity price rises. At lunchtime in the East, the All Ordinaries Index (XAO) was up 33 points to 4,381.5 points. The Westpac Consumer Sentiment index was realised early in trade and the better than expected result also helped boost markets. The index was up 1.6% in September when the market was looking for a flat result.

Today the material and finance sectors are leading the charge with the S&P/ASX 200 Materials index up 1.2% and the S&P/ASX 200 Financials index up 1.12%.
Once again the market has been helped by a lift in the US$ spot iron ore price overnight, up more than 5% to back above US$100 a dry tonne. Iron ore players Fortescue Metals Group (FMG) and Rio Tinto (RIO) turned the corner today. Fortescue Metals share prices was up over 2.8% to $3.46 while RIO added 1.5% in early trade to $55.34. Our largest listed miner BHP Billiton limited (BHP) was also higher, up 0.8% to $32.87. Medium to small cap mineral also listed strong gains as base metal prices and the oil price gained as well, now above US$97 a barrel. Atlas Iron Limited (AGO) up 3.75% while integrated miner, Arrium Limited (ARI, formerly OneSteel Limited) lifted by 4.39% to $0.59.50c. Metal recycler SIMS Metal Management Limited (SGM) added 3.46% to$9.87.

Financial stocks made back strong gains in the AM session, with National Australia Bank (NAB) the only improver amongst the big four. NAB edged higher by 0.8% to $25.28. Commonwealth Bank of Australia (CBA) added another 1.5% to $55.00, ANZ Banking Group (ANZ) lifted 0.6% to $24.26, while Westpac Banking Corp. (WBC) up by 1.6% to $23.96.

The healthcare sector gave back some of yesterday's gains. S&P/ASX 200 Healthcare index increased by only 0.29% and the biopharmaceutical company CSL Limited (CSL) rose over 2% yesterday and today was down 0.09% in early trade to $44.81. Bionic ear implant maker, Cochlear (COH) fell 0.8% after a lift of 2.2% yesterday as investors moved out of defensive stocks.

The Utilities sector was also hit by selling as well. SP AusNet (SPN) off 2.2% and Australian Pipeline Trust and APT Investment firm APA (APA) off 2.2% to $4.72 while AGL Energy Limited (AGK) did gain a few cents to $14.89. Shares in Telstra (TLS) climbed higher up 0.6% to $3.82.

The retail sector was a bit lower, Wesfarmers Limited (WES) off 1.15% to $34.40 and Woolworths Limited (WOW) off 0.17%.

Elsewhere, the Australian Agricultural Company Limited (AAC) lost over 1.9% to $1.28 and global pallet provider Brambles Limited (BXB) off 1.7% to $6.87.

The Australian dollar is buying US104.69c, £0.6514 and €0.8142.

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