Australian Stock Market Report – Midday7/30/2012

Lunchtime REPORT
(1pm AEST)

Once again global market rallied higher on Friday, boosted by renewed expectations that The European European Central Bank (EBC) will announce a new form of stimulus for the European markets when it meets on Thursday. On Friday night the German Chancellor Angela Merkel, French President Francois Hollande and Italian Prime Minister Mario Monti all agreed more needs to be down to help stabilise the markets and the Euro. The market is now expecting this will mean that the ECB could resume its bonds purchasing programme, rather than looking at cutting interest rates again.

On Friday, Spanish and Italian market lifted by around 3% and the UK market added just under 1%.
The local share market opened higher today, once again boosted by overseas movements and a lift in commodity prices. At the open of trade the All Ordinaries Index (XAO) was up 37 points. By lunchtime, the All Ordinaries Index (XAO) was up 30 points to 4,265. Aussie investors were selling out of defensive stocks like: gas and electricity, and foods and liquor retailers. Mining and banking stocks led the charge higher in morning trade.

By lunch the best performing sector was the S&P/ASX 200 Financials sector up over 1.45%, helped by our big name banking firms and some nice gains for our insurance stocks. Commonwealth Bank of Australia (CBA) listed the biggest gain in morning trade out of the big banks. The CommBank share price was up by 2.24% to $57.44. Australia and New Zealand Banking Group Limited (ANZ) share price was up 1.26% to $23.37 while Westpac Banking Corporation (WBC) lifted 1.46% to $23.34 and National Australia Bank Limited (NAB) up over 1.3%. Insurance stocks also higher, Suncorp Group Limited (SUN) added 0.6% to $8.51 and Insurance Australia Group Limited up 0.8% to $3.74.

Today the S&P/ASX 200 Energy sector gained 0.6% this morning. The larger energy producers and marketeers listed minimal gains, while the smaller firms went for a solid run. The US$ oil price lifted above US$90 a barrel on Friday and the price has just held above that level in early Asian trade. The US$ oil price is currently at US$90.08 a barrel. Oil Search Limited (OSH) and Santos Limited (STO) both reasonably flat after their joint venture partner in the PNG LNG pipeline project ExxonMobil Corp. (XOM) announced it started drilling operations for the PNG LNG Project at its gas field, in the Southern Highlands of Papua New Guinea. Woodside Petroleum Limited (WPL) added 0.3% in early trade to $33.19 and Origin Energy Limited (ORG) fell back to $11.52 off 0.8%. Beach Energy Limited (BPT) released its quarterly and full year 2012 results today. Beach's full year was higher than expected, up 25%, and for the quarter was up 6%. Production for the firm lifted 15% for the full year and up 3% over the quarter helped by a lift in activity and output in its Cooper Basin operation. Beach shares Started off well but share price fell back by lunch.

The S&P/ASX 200 Materials sector added 0.97%, after the share price of both BHP Billiton Limited (BHP) and Rio Tinto Limited (RIO) lifted by over 1%. Iron ore producer, Fortescue Metals (FMG) gave back 1.05% to $4.11 as concern builds over the recent slump in iron ore prices.

Our largest listed gold producer, Newcrest Mining Limited (NCM) jumped another 2.12% after adding over 3.4% by the close on Friday. 1 Newcrest share is now worth $23.64, the highest level since the 9th of July 2012. Newcrest shares moved higher after the US dollar gold price continued to climb higher on Friday night. Alacer Gold Corp's (AQG) depository receipts lifted nearly 3% and Medusa Mining Limited (MML) added 2.6%. The share price of Kingsgate Consolidated Limited (KCN) moved lower off by 3.87%.

G.U.D. Holdings Limited (GUD) bounced back from Friday's falls up 1.4% by lunchtime, while plumbing supplier and wholesaler Reece Australia Limited (REH) lost over 5% in early trade to $18.00 a share.

Elsewhere, QR National Limited added 0.6% to $3.21 and Qantas Airways Limited (QAN) shares added 0.75% with rival Virgin Australia (VAH) today up over 1.8%. Global on-line travel firms are in focus, after US based Expedia rallied higher on Friday, Expedia shares up 20% after reporting another solid quarter of sales up 1.6%. Today like Aussie stocks: Wotif.com Holdings Limited (WTF) up 2.48%, Flight Centre Limited (FLT) up 2.1% to $21.40, and Webjet Limited (WEB) up 0.3%.

The Australian dollar is worth US104.62c, €0.8513 and £0.6655.

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