Australian Stock Market Report – Midday 9/28/2012

MIDDAY REPORT
(11.30am AEST)

After a slight improvement in markets yesterday, Australian shares are a touch weaker at lunch. The All Ordinaries Index is down 0.1 pct or 5.7 pts to 4397.1. Last night, the Spanish parliament released its first draft of a tough 2013 budget. Around €39 billion of spending cuts were announced, which is an 8.9 pct reduction in spending compared to this current year. Perhaps this can be summed up as being good news for markets (over the very short term) and bad news for those living in Spain. The unemployment rate there is already five times worse than in Australia, at 25 pct.

The mining and energy sectors are a touch higher which is helping to minimise the day's losses. Australia's biggest gold producer, Newcrest Mining (NCM) is up 3.19 pct or 90 cents to $29.10, while Rio Tinto (RIO) is 0.95 pct or 51 cents lower to $53.08. BHP Billiton (BHP) is only down by 2 cents to $33.00.

The major banks are mixed, with only National Australia Bank (NAB) managing to improve after a few hours of trade, up 0.24 pct or 6 cents to $25.49.Westpac (WBC) is up by a few cents, while Commonwealth Bank of Australia (CBA) and ANZ Banking Group (ANZ) are off by 0.2 pct.

Yesterday, Australia's largest supermarket chain Woolworths (WOW) announced the sale of its 325 Dick Smith Electronics stores for just $20 million (around $61,000 per store) to a private equity firm. WOW shares are down for the second straight day, off by 0.76 pct at the moment.

Today is also set to be the busiest day of the week in the region, with a whole host of economic reports issued in Japan (our second largest trading partner). Data on its manufacturing sector, inflation, unemployment, retail sales and housing are all released mixed results so far today. The jobless rate improved while industrial production disappointed.

On the economic front, the latest private sector credit numbers for the month of August have been issued. This measures the change in the total dollar value of new credit issued to both businesses and consumers across the country. The result came in slightly lower than expected, with a rise of just 0.2 pct. More information will be provided in the afternoon report today.

Following the end of daylight savings, major Asian markets will be trading between the hours mentioned below until October this year.

The Hong Kong sharemarket trades in two sessions each day and will now open for trade between 11.30am (AEST) and 2pm (AEST) while the second session is between 3.30pm (AEST) and 6pm (AEST).

Out of Japan, the first session will be between 11am (AEST) and 1pm (AEST) while the second session is between 2.30pm (AEST) and 5pm (AEST).

The Singapore exchange will be open for trade between 11am and 2.30pm (AEST) for the first session and then between 4pm and 7pm (AEST) for the second.

U.S futures are currently pointing to a flat start to trade tonight. The U.S market trades between 11.30pm (AEST) and 7am (AEST).

So far in trade at lunch, 965 million shares have been traded worth $3.29 billion. 392 shares are up, 323 are lower and 278 are currently unchanged.

The Australian dollar (AUD) continues to gain ground and buys US104.4 cents, €80.8 cents and £64.3 pence.

The AUD is the world's fifth most traded currency behind the U.S dollar, the Euro, Japanese Yen and British Pound. The AUD accounts for around 7 pct of all foreign exchange trades.

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