Australian Stock Market Report – Midday7/20/2012

MIDDAY REPORT
(12.30pm AEST)

The Australian share market closed higher yesterday and overnight the European and U.S. markets gathered pace, but our market lost ground at the start of trade, even with higher gold, metal and oil prices overnight.

Locally The All Ordinaries Index (XAO) opened 15 points lower, but by lunch time the market had peeled back early losses and was gaining momentum. At 12.30pm The All Ordinaries Index (XAO) was 3 points higher or 0.1% to 4,239 points.

Shares in the S&P/ASX 200 Energy sector have fallen back today after their great run yesterday. The US$ oil price broke through 7week highs overnight, but the global slowdown concern and Friday profit taking hit stocks this morning. Woodside Petroleum (WPL) released its June quarter production numbers and increased its future production estimates yesterday. Woodside shares started weaker but by lunch had gained a few cents to be 0.46% higher to $32.82. Santos (STO) also reported strong production numbers yesterday and its stock price gained over 5%, today the share price has come under pressure and at lunch the price is down a few cents to $ $10.61.

Smaller energy players are bucking the negative trend, Beach Energy Limited (BPT) up 3.8% and Aurora Oil & Gas Limited (AUT) added over 2.9%.

Overnight metal prices gained on the London Metals Exchange (LME) today the miners have come back from early lows, the big guns leading the charge. BHP Billiton Limited (BHP) up 1% to $31.42, while Rio Tinto Limited (RIO) gained 0.8% to $53.83 but iron ore miner, Fortescue Metals Group Limited (FMG) fell another 3.16% to $4.45.

Financial stocks followed the losses from U.S. banks over the last few days hit the market today, as well as end of week profit taking. Shares in the Commonwealth Bank of Australia (CBA) backed off from the highest level since May 2010, off 0.79 % to $55.90. National Australia Bank Limited (NAB) gave back 0.25% to just above $24 a share while Australia and New Zealand Banking Group Limited (ANZ) fell 0.4% to $23.13. The insurers were also weak and most property trusts also under the pump, one stand out was Westfield Group (WDC) that bucked the trend and gained over 1% by lunch.

The media sector back in the spot light with the news Ten Networks (TEN) has gone in a trading halt in early trade. The rumours were right! Ten Network Holdings had agreed to sell its outdoor advertising business, Eye Corp, to Champ Private Equity, the owners of Outdoor Media Operations (OMO) for up to $145 million. TEN's shares came back on line at 11.00am and the share price rose 0.99% by lunchtime to $0.51. Fairfax (FXJ) share price added 2.2% to $0.57.75. Seven West Media Limited (SWM) also lifted, up over 5% to $1.52.

The Australian dollar continues to gain ground as global central banks continued to by our currency, 1 Aussie dollar is worth US104.17c, also buying £0.6633 and €84.97c.

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