Australian Stock Market Report – Midday October 20, 2014

n office worker walks past an Australian Securities Exchange (ASX) window showing the main losses for the day in central Sydney July 23, 2012. Australian shares slumped 1.7 percent on Monday, the biggest one-day fall in seven weeks, as investors fled from riskier assets such as equities on renewed fears that Spain may be unable to dodge a costly bailout. Reuters

 Australian shares are improving for the fifth consecutive day, with the All Ordinaries Index (XAO) up 1 per cent or 55pts to 5314.5. All major industries are improving at lunch however global markets remain volatile and could easily change directions on news and data.

 American markets surged on Friday with the Dow Jones rising 1.6 per cent, the S&P500 up 1.3 per cent and the tech specific Nasdaq up 1 per cent. European stocks jumped impressively by as much as 3.5 per cent; however slumped by almost as much mid-week.

 Ten Network Holdings (TEN) is rising by 6.1 per cent following unconfirmed reports it has had some merger talks with Fairfax (FXJ). Last week TEN posted a $168m annual loss which fell short of expectations. TEN is still down 11.5 per cent so far this month.

 Transfield Services (TSE) is surging by 26.6 per cent after rejecting a $1bn takeover bid from Spain's Ferrovial. The project management and maintenance services company considers the offer to be too low.

 Mining stocks are continuing to improve after being the best performers last week. The S&P/ASX 200 Materials Index is up 1.12 per cent. BHP Billiton (BHP) issues its quarterly production numbers on Wednesday and holds its Annual General Meeting (AGM) with investors on Thursday.

 CommSec's State of the States report has been issued this morning with NSW taking the lead from WA. Strong population growth and a robust property market have been two drivers of the NSW economy. The state also has the fastest annual economic growth rate of 6.3 per cent. CommSec's Chief Economist Craig James said that "The momentum that we identified in NSW has propelled it to the top of the economic performance rankings. And the simple reason for the lift in the rankings is housing. NSW is currently "playing catch-up" after years of underbuilding - where demand for homes exceeded supply, pushing the rental vacancy rate to record lows"

 Volume remains a touch light with 666.5m shares traded worth $1.38bn. 548 stocks are up, 221 stocks are in the red and 283 are unchanged.

 The Australian dollar buys US$0.877.

 Tonight 40 US companies will be issuing their quarterly earnings including tech giant Apple. Last week Google announced a $2.81bn quarterly profit and generated $16.5bn in revenue which was short of expectations. IBM, Haliburton and Peabody Energy are other big names on the earnings calendar tonight.

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