Australian Stock Market Report – Midday12/19/2012

MID-SESSION REPORT
(12pm AEDT)

The Australian sharemarket continues its stellar run, with the All Ordinaries Index (XAO) improving modestly once again. Of the last 23 sessions, the Aussie market has ended higher on 17 occasions and has only finished in the red once in 9 trading days. The XAO is up by 0.5 per cent or 22.6 pts to 4633.1.

Global markets ended higher overnight, which has given us a positive lead to work with in early trade. A reading on the health of North America's housing market highlighted an ever improving U.S property story.

The defensive telecommunications sector is losing ground while the rest of the market is rising strongly. The standouts are the energy and healthcare stocks, which are both up more than 1 per cent. Oil and gas producer, Santos (STO) is up 1.11 per cent or 12 cents to $10.91 while Woodside Petroleum (WPL) is largely flat.

Australia's two mining giants, BHP Billiton (BHP) and Rio Tinto (RIO) are also on the rise for the 11th consecutive session. BHP is up 0.75 per cent or 27 cents to $36.93 while RIO is 0.93 per cent or 59 cents stronger to $65.30. BHP recently cracked through resistance levels not reached since early February this year. The evasive $38.00 mark is creeping up, however hasn't been truly broken in well over a year.

It has been no surprise that surfwear retailer Billabong (BBG) has done it tough over the past few years, however its shares are down by another 11.73 per cent or 11.5 cents to 86.5 cents at lunch. Earlier this week, it received a $527 million takeover bid from the retailer's former President of the Americas. This makes it the fifth bid in a year. The market doesn't seem upbeat about the likelihood of the takeover, as has been made clear in its share price after resuming trade. BBG was in a trading halt for two sessions. One of the takeover's conditions is that if confidentiality is lost, for any reason, the consortium could retract the offer immediately.

The price of gold is at its lowest level since August, with the country's largest producer, Newcrest Mining (NCM) down 2.23 per cent or 52 cents to $22.76. The price of gold has pulled back for three straight months however gold prices have increased for 12 consecutive years. At the start of 2001, gold was trading at just US$273 an ounce, six times less than the current US$1670 an ounce.

Three of the four major banks are higher by close to 0.5 per cent, while Commonwealth Bank (CBA) is easing by 0.08 per cent or 5 cents to $61.39. ANZ Banking Group (ANZ) is scheduled to hold its Annual General Meeting (AGM) with shareholders today.

No major economic news is expected locally today, however Japan recorded its fourth straight trade deficit (imports greater than exports) as was forecast by the market. The Japanese economy has struggled significantly since the March 2011 natural disasters and near nuclear meltdown.

Following the start of daylight savings in October, major markets in the region will be trading between the hours mentioned below until April 2013.

The Hong Kong sharemarket trades in two sessions each day and will now open for trade between 12.30pm (AEDT) and 3pm (AEDT) while the second session is between 4pm (AEDT) and 7pm (AEDT).

Out of Japan, the first session will be between 11am (AEDT) and 1pm (AEDT) while the second session is between 2.30pm (AEDT) and 5pm (AEDT).

The Singapore exchange will be open for trade between 12pm and 3.30pm (AEDT) for the first session and then between 5pm and 8pm (AEDT) for the second.

U.S futures are currently pointing to a slightly weaker start to trade tonight. The U.S market trades between 1.30am (AEDT) and 8am (AEDT).

So far in trade at lunch, 667 million shares have been traded worth $1.65 billion. 447 shares are up, 293 are lower and 331 are currently unchanged.

The Australian dollar (AUD) is weaker and buys US105.1 cents, €79.4 cents and £64.6 pence. The AUD is still relatively close to trading at its strongest levels against the greenback since September.

The AUD is the world's fifth most traded currency behind the U.S dollar, the Euro, Japanese Yen and British Pound. The AUD accounts for around 7 pct of all foreign exchange trades.

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