Australian Stock Market Report – Midday 9/6/13

MID SESSION REPORT
(12.35pm)
Aussie Market started off weaker than expected.

US share markets closed higher for the 3rd straight day on the back of stronger economic data.
In the US, better than expected service sector data and a fall in weekly jobless claims helping keep the market out of the red. The DOW closed up 6pts and the NASDAQ up 9.7pts.

The Australian market opened weaker than expected with the all Ordinaries Index falling around 20points by lunchtime. We expected the market to be very quiet today but we have seen a far bit of selling in the early session as overseas investors prepared for the release of the US August non-farm payrolls (the all-important monthly job data out from the states tonight).The market consensus is that 185,000 jobs were added last month and that the US unemployment rate will fall to 7.3%.

The result of tomorrow's election will be keenly watched by the markets as investors eagerly awaiting market and government stability.
The Aussie market lost more ground in early trade than other markets in our region with the Shanghai Exchange set to close higher for the week.

Today the market is in defensive mode with the S&P/ASX 200 A-REIT property sector the only sector to move higher in the early session. The banks, miners and retailers held the market back with the precious metal miners once again being the worst hit. Overnight we did see the US dollar gold price continued to fall and in Asian trade the gold price has slipped another US$2to US$1,371/oz. Newcrest Mining Limited (NCM off 3.5% to $12.74, Regis Resources Limited off 3.5% and Silver Lake Resources Limited (SLR) off 5.8%.

Company news was very thin on the ground.
Leighton Holdings Limited (LEI) subsidiary "Thiess" announced it had won a new LNG contract worth $1.8Billion. The contract is to run the Curtis, liquefied natural gas (LNG) project in Queensland. Leighton's share price fell 0.4%.

The Airlines sector once again in focus after the lift in the jet fuel price in overnight trade and the news that The Australian Competition and Consumer Commission (ACCC) announced that it would not oppose the proposed acquisition by Air New Zealand Limited (AIZ) of an additional 6% of Virgin Australia Holdings Pty Ltd (VAH). AIZ gained 2.48% to $1.24 while VAH lifted by 0.6% to $0.4175 and Qantas (QAN) lost ground off $0.05 or 0.2%.

US crude inventories decreased in the last week. This pushed oil prices and energy stocks higher overnight. US$ NYMEX crude now at US$108.40/barrel but this did not helped limit the losses in the energy sector today. Oil Search Limited (OSH) fell 1.8% while WorleyParsons Limited was one of the better performers up 0.57%.

The Australian dollar was well supported in early trade even with the slide in the markets and the gold price. 1 Aussie dollar will now buy you 0.9135USC and 0.6957Euro.

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