Australian Stock Market Report – Midday June 13, 2014

MID-SESSION REPORT
(12.10pm AEST)

The Australian sharemarket is losing ground for the third straight day and is at a two-month low due to a renewed focus on Iraq. President Obama hasn't ruled out the possibility of military action in the troubled nation. As expected sharemarkets and commodities have been pushed lower by the uncertainty. Looking ahead, plenty of Chinese data in the dying stages of the session will be in focus at 3.30pm (AEST) this afternoon.

The All Ordinaries Index (XAO) is down 0.8 per cent and is trading below the 5400pt mark for the first time in three weeks.

The energy sector is the lone improver today, helped by a surging oil price overnight. Crude oil jumped by more than 2 per cent, due to supply concerns which has pushed the energy sector 0.9 per cent higher. All other sectors are substantially softer.

The miners are down 1.6 per cent, with weaker commodity prices resulting in the industry's worst week in three months. BHP Billiton (BHP) is down 1.2 per cent, Rio Tinto (RIO) is down 2.5 per cent and Fortescue Metals (FMG) is 4.7 per cent lower. Smaller producers such as Atlas Iron (AGO) and Gindalbie Metals (GBG) are both trading around 5.5 year lows.

The Australian dollar remains above US94c, which isn't ideal for the country's exporters. A mixture of softer commodity prices and a firmer Australian dollar is working against the miners in particular. BHP is at a three-month low, RIO is at an 11-month low and FMG is at its worst levels in 10-months.

Australia's big four banks are all substantially lower, with Westpac (WBC) the worst as it slides by 1.1 per cent. The majors are wiping out 10.7pts from the All Ordinaries Index.

At lunch, 947.8 million shares have been traded worth $2.66 billion. 297 stocks are higher, 498 are in the red and 334 are unchanged.

Looking ahead, three economic reports in China will be important this afternoon. Data on retail spending, production and investment will all be issued. Further abroad, Europe's latest monthly trade balance at 7pm (AEST) and in the US, business inflation and consumer confidence will be highlights.