Australian Stock Market Report – Midday June 23, 2014

MID-SESSION REPORT
(12.15pm AEST)

The Australian sharemarket is kicking off the new week a little firmer, thanks to another record close in U.S. markets on Friday and some better than expected Chinese economic news this morning. The All Ordinaries Index (XAO) is up 0.9 per cent, with all sectors in the black at lunch.

HSBC's Flash Manufacturing PMI out at 11.45am (AEST) today was better than forecast, with a reading of 50.8 signalling the first expansion for the industry in six months. The result has boosted not only shares but also currencies. The Australian dollar is nearing a seven-month high against the greenback and currently buys US94.3c.

The Ten Network (TEN) is up 5.1 per cent on media reports that a U.S. private equity firm is considering TEN as a potential takeover target. TEN has slumped by 8 per cent so far this year, adding to 2013's 3.5 per cent slide.

Property group Lend Lease (LLC) is up by around 1 per cent; however has pulled back from the highs hit earlier this morning. Reports that the Barangaroo site near Darling Harbour has been evacuated due to a bomb scare is keeping investors slightly on edge.

The mining sector is surging by 1.8 per cent, thanks to a firmer iron ore price and solid Chinese data today. Australia's third largest iron ore producer Fortescue Metals (FMG) is up 5.7 per cent while Rio Tinto (RIO) is up 2.9 per cent and BHP Billiton (BHP) is gaining 1.6 per cent. RIO is Australia's biggest producer of iron ore.

The price of U.S. oil hit a fresh nine-month high, with the conflict in Iraq continuing. The major banks are all higher, with National Bank (NAB) the standout; up 0.94 per cent

This is likely to be a quiet week in Australia, with a lack of major economic news or scheduled corporate events on the agenda. The highlights in Australia are likely to be the financial accounts for the March quarter and job vacancies on Thursday, together with the Resources and Energy Quarterly. This contains forecasts for the mining sector and is provided by the Bureau of Resources and Energy Economics.

At lunch, 1.01 billion shares have changed hands worth $2.01 billion. 486 stocks are higher, 411 are in the red and 361 are unchanged.