Australian Stock Market Report – Midday12/24/2012

MID-SESSION REPORT
(10.50am AEDT)

The Australian share market is tracking higher in the early session, on a shortened day's trade ahead of the Christmas break. The ASX will close at 2.10pm AEDT this afternoon and will remain closed until Thursday, 27th December.

On Friday in the US, stocks closed in the red on concerns about the Fiscal Cliff negotiations. Lawmakers in Washington have only one week left to strike a deal which will avert automatic tax increases and spending cuts due on January 1, 2013. After the bell on Friday, President Obama made some positive commentary that he believed a deal to avert the fiscal cliff would be averted, but that no party would get exactly what they wanted.

In early trade, the All Ordinaries Index (XAO) is up 19.6pts or 0.4pct to 4654.8.

Energy players are well supported despite the crude oil price falling on Friday night in line with equity markets. Shares in Santos (STO) are up 1pct t $11.01 while Woodside Petroleum (WPL) has increased by 0.7pct to $33.98.

Among the big miners, BHP Billiton (BHP) has gained 0.5pct to $36.90 while Rio Tinto (RIO) has gained 0.6pct to $65.14.

Financial stocks are also generally firmer.

Retailers are mixed on the final shopping day before Christmas with Myer Limited (MYR) the best out of the traditional retailers, firmer by 2pct to $2.09.

Troubled surf-wear retailer Billabong (BBG) will allow its latest suitor, former board member Paul Naude, to conduct due diligence on the company. The former Billabong director and president of its American business has made a $527 million takeover offer for the retailer, as part of a consortium which includes New-York based private equity group Sycamore Partners and Bank of America Merrill Lynch. BBG shares are slightly lower in early trade at 81.5c. Mr Naude's offer is believed to value the company at $1.10 per share.

Trading volumes are low today, with 198 million shares changing hands so far, worth $243 million. 322 are up, 238 are down and 236 are unchanged.

The Australian dollar is worth US104.02c, £0.6438 and €78.9c

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