Australian Stock Market Report – Midday October 17, 2014

Specialist trader Geoffrey Friedman monitors his screen as a television displays the Federal Reserve decision, on the floor of the New York Stock Exchange June 18, 2014. The U.S. Federal Reserve on Wednesday hinted at a slightly faster pace of interest rate increases starting next year, but suggested benchmark borrowing costs in the long-run would be lower than it had indicated previously. REUTERS/Brendan McDermid (UNITED STATES - Tags: BUSINESS)

 Global markets finished mixed overnight with investors shrugging off earnings results from Google, Goldman Sachs and Netflix together with better than expected economic news on jobless claims and industrial production. Investors paid more attention to comments by James Bullard (non-voting member of the FOMC). He said the Fed should consider delaying the end of its stimulus program with recent sharpmarket moves and falling inflation two main reasons.

 Mining stocks are remaining modestly firmer at lunch withgains from BHP Billiton (BHP) and Fortescue Metals (FMG) helping most. BHP confirmed its intention to list its $15bn demerged company in Australia, South Africa and on theLondon Exchange.

 Iron ore fell by 2.1 per cent overnight to US$80.5 per dry tonne. At current prices it's estimated that around a quarter of iron ore supply on the market is not profitable. Smaller producers of ore are generally higher cost miners due to reduced production volumes.

 Virgin Australia (VAH) is down 1.3 per cent today. The country's second largest airline will pay a symbolic $1 to buy the remaining 40 per cent stake of underperforming Tiger Air Australia. Qantas (QAN) is up 0.75 per cent.

 Major banks are up 0.9 per cent which is adding most to the market's broader gains. The improvements from the big four are adding 16.5pts to the ASX 200's gains (around 60 per cent of the market's improvements).

 Volume at lunch is average with 805.2m shares traded worth $2.25bn. 465 stocks are higher, 308 in the red and 306 unchanged.

 The Australian dollar buys US$0.878 and €0.686.

 No economic news is scheduled for release in Australia or the region today.

 Tonight quarterly European GDP (growth) and a speech by Federal Reserve Chair Janet Yellen will be highlights and risks to currencies and markets. Bank of New York Mellon and Morgan Stanley are both scheduled to post quarterly earnings.

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