Australian Stock Market Report – Midday December 22, 2014

A man is reflected as he walks past the Australian Securities Exchange building in central Sydney April 8, 2011. Singapore Exchange Ltd has terminated its $8 billion bid for Australia's ASX Ltd after the Australian government formally rejected the offer on national interest grounds and said changes to the country's financial systems were needed before the bourse could be bought by foreigners. REUTERS/Daniel Munoz (AUSTRALIA - Tags: BUSINESS POLITICS)

 The ASX 200 has started a holiday shortened week in the same fashion it ended the previous week; with solid gains. At lunch on the east coast the index was close to the best levels of the day. Local stocks pressed ahead on the back of gains for US stocks at weeks end, which capped off an encouraging week on Wall St. After being up 96 points, the Dow Jones finished higher by almost 27 points or 0.2%. The S&P 500 index rose by 0.5% while the Nasdaq lifted by 17 points or 0.4%. For the week, the Dow rose by 3.0%, the S&P rose by 3.4% and the Nasdaq gained 2.4%. European shares were mixed as investors positioned after the steep gains recorded by markets on Thursday. The euro zone blue-chip EuroSTOXX 50 lost 0.4% and the German Dax lost 0.3%, although in London, the FTSE rose by 1.2%.

 Energy stocks were the cornerstone for the early gains in local trade after world oil prices posted their biggest daily gains in two years at the end of last week with analysts attributing the gains to traders taking profits on short positions. There is debate by analysts that producers have put a short-term floor price for oil at US$60 a barrel. At the end of last week Brent crude rose by US$2.11 or 3.6% to US$61.38 a barrel. US Nymex crude rose by US$2.41 or 4.5% to US$56.52 a barrel. Over the week Brent crude fell by US47c or 0.8% while Nymex eased by US$1.29 or 2.1%. A short time ago Santos shares were at $8.43, a gain of 44 cents or 5.5%, Oil Search was at $8.01, up by 33 cents or 4.4% and Woodside Petroleum was trading at $38.62, a rise of 85 cents or 2.2%.

 Wesfarmers (WES) shares rose to $41.81 on Monday, a gain of 50 cents or 1.2% amidst news that Coles has been ordered to pay $11.25 million in fines and costs after a court agreed to a settlement with the ACCC. The Federal Court ruled that Coles had engaged in illegal and unconscionable conduct in its dealings with suppliers. The court had suggested last week that the settlement with the Australian Competition and Consumer Commission was not severe enough. The judgement strongly criticised Coles, saying its misconduct was serious, deliberate and repeated and that it misused its bargaining power. More than 200 suppliers will now potentially be able to seek refunds from Coles over extra payments that were demanded.

 Major currencies have fallen against the greenback in European and US trade over the last day with the US dollar index at the highest levels since April 2006. The Aussie dollar fell from highs near US81.90c to around US81.20c in the pre-ceding session and was around US81.30c in early Asian trade on Monday.

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