Australian Stock Market Report – Midday October 22, 2014

A pedestrian talking on his phone is reflected in the window of the Australian Securities Exchange as an investor watches boards displaying stock prices in central Sydney October 16, 2014. Australian shares slid 1.1 percent on Thursday after U.S. stocks lost ground as investors continued to fret about global growth, though a recovery among gold producers prevented steeper losses. REUTERS/David Gray (AUSTRALIA - Tags: BUSINESS)

 The positive tone for the Australian share market has extended into Wednesday following solid gains for Wall St overnight. US stocks recorded strong gains on Tuesday supported by healthy corporate results. The S&P 500 has now gained more than 6% since its session low last Wednesday. In Europe stock indices rose on speculation that the European Central Bank is considering buying corporate bonds to revive the region's economy. Reports suggested a plan could be approved by December and start early next year. Such an initiative would help free up bank balance sheets for lending.

 Early local trade saw the ASX 200 open with a 15 point gain before moving on to session highs when the index was ahead by 58 points. There after the market steadied as investors waited for the release of quarterly inflation data. Every sector measured by the ASX enjoyed solid support with the exception of the Utilities sector, AGL (AGK) shares were down 5 cents or 0.3% at $13.70. The Materials sector was the best improved group with Fortescue Metals Group (FMG) ahead by 2.4%

 At 11:30 AEDT the ABS reported that consumer prices rose 0.5% in the third quarter to be up 2.3% in the last year. Market consensus had consumer prices rising 0.4% in the quarter and 2.3% for the year. Among the themes at play in the report was the moderation in price inflation following the removal of the carbon tax at the start of the third quarter. The impact of the report on the markets was modest with the ASX 200 edging higher by a handful of points in the half hour after the report was released.

 Production numbers for the September quarter released by BHP Billiton delivered strong performances from the iron ore and coking coal divisions which helped the shares rise by 1.5 per cent. The miner reported that production rose to a quarterly record of 62 million tonnes at its West Australian Iron Ore joint venture an increase of 15 per cent compared to the same time a year ago. The group's total iron ore output was up 17 per cent from a year ago, and one per cent compared to the June quarter. Metallurgical coal production rose to 12.8 million tonnes, up 25 per cent from a year ago and four per cent on the June quarter. Petroleum production increased seven per cent from a year ago to 67.4 million barrels of oil equivalent due to a 49 per cent jump in output from the US, and up four per cent from the previous quarter.

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