BASIC MATERIALS

COMMSEC MORNING REPORT (7am AEST)US same store sales rose by 6.5pct in June - well ahead of expectations for a 4.9pct rise. Of the 23 chain stores tracked by Thomson Reuters all but four of the chains reported an increase. The ICSC expects sales to rise by 4.5-5.5pct in July.

MARKET CLOSE - CommSec Report (4.30pm AEST)The Australian sharemarket has managed to end higher by the most modest of margins for the third time this week despite being around 0.4 pct lower at one point this morning.

China has expressed concern on the planned carbon tax by the Australia government, which the Chinese government said might be a step back for the country's mining boom.

Home owners are still refinancing their mortgages, even as the property market remains flat, the latest Bankwest/MFAA* Home Finance Index has shown. The Home Finance Index, which surveyed more than 1,139 respondents, revealed that one in four (24.7%) had refinanced their loan in the past two years and 14.2 per cent had refinanced in the previous year, an increase on the previous HFI.

National jobs figures released by the Australian Bureau of Statistics today revealed a significant rebound in the employment market, confirming the underlying strength of the Australian economy.

The Australian sharemarket is improving after a slow start to trade, following a solid employment report this morning. The All Ordinaries index (XAO) is currently flat. Almost all sectors are trading slightly lower at lunch however.

The Australian government has mellowed down its carbon tax policy that would not be too much of a burden to small and medium enterprises. Industries affected by the carbon price had been reduced to 500 from the previous 1000, the government said.

The campaign for carbon pricing have gathered new supporters as the push for the government policy has turned to popularity and gathering of numbers.

The Australian Government plans to announce a price on pollution this weekend as the central element of a comprehensive policy to tackle climate change, cut pollution and drive the transformation of the Australian economy to a clean energy future.

Australia's mining boom strengthened the country's trade surplus that has hit a seven-month high to A$2.33 billion ($2.5 billion), from a revised A$1.62 billion surplus in April, the Bureau of Statistics said in a report in Sydney on Tuesday.

Australia's Lynas Corp. took in a new shareholder as Japanese bank Mitsubishi UFJ Financial Group has taken close to a 10 percent stake in the mining firm worth $324 million.

Australia’s consumer inflation rates remained flat in June that may reduce the pressure on the central bank to increase benchmark interest rates in the near term, according to the private-sector led survey by TD Securities and the Melbourne Institute.

The manufacturing sector in Australia has begun its positive production kick in four months in spite the difficulties in coping with the high value of the Australian dollar and subdued local demand.

Investors at the Australian Stock Market is expected to rebound albeit cautiously at today's trading. Here are the views of two of the top market analysts on how the market will likely perform on 4 July, Monday.

Prime Minister Julia Gillard has soften her tone and argued with new semantics to push for the carbon tax.

An independent team studying the environmental impact of Australia's Lynas Corp.'s proposed rare earths facility in Malaysia said more safety measures need be in place.

From IG Markets Analyst Ben Potter:On Wall Street overnight, stock finished the quarter and end of the first half in bullish fashion, logging its fourth consecutive gain as Greece passed a second crucial vote on the implementation of the latest austerity package and a much stronger-than-expected Chicago PMI number.

The proposed mining tax will successfully pass the parliamentary scrutiny and keep its present form, according to Prime Minister Julia Gillard, who believes that firm backings from independent MPs will seal the measures’ good fortunes.

Small business support for the Australian Government has fallen to a 15-year low, according to the Sensis Business Index released today. SMEs have become much less supportive of the Federal Government’s policies, with the indicator declining sharply during the quarter to be the lowest level since February 1996.

At lunch the Australian share market is having a much better day, with the All Ordinaries index (XAO) around 0.4 pct or 19.7 pts higher to 4533.5. Close to all sectors are higher, with gains from the banks and miners helping to keep the market in positive territory.

Admittedly would weigh on household budgets, the Australian government has volunteered to share some of the financial burden entailed by the proposed carbon tax.

Australia's Prime Minister Julia Gillard is celebrating her first year in government with almost 60 percent of citizens wary of extending support to reforms she wanted to undertake specifically a carbon emissions tax deemed unpopular in an economy fueled by the mining sector.

The Australian stock market is seen receiving a little shove from the negative leads over volatile overnight sessions in the US and European stock markets. The ASX is seen performing modestly on Friday.

Perseus Mining Limited (ASX/TSX: PRU) has drawn down US$85M under a Project Finance Facility for the completion of the company's Company's Central Ashanti Gold Project ("CAGP") in Ghana, Africa.

Malaysia's appointed independent panel investigating the environmental impact of the Australian rare earths plant in the country has completed its work and is set to issue its findings by end of the month.

The vaunted mining boom may have largely fueled up the national economy yet in the case of the Northern Territory, its residential construction industry appeared to have absorbed the negative impacts of the two-wind growth.

India's Tata Steel has accepted the takeover offer of Rio Tinto for the Riversdale Mines in Africa, allowing the London-based mineral producer to have an edge over iron ore grade coal produced by Riversdale.

For a third straight month, business owners in Australia have been down by pessimism as the Australian dollar reached new highs, an indicative report by the National Australia Bank (NAB) said.

There is now no stopping the Australian government from implementing the economy-wide carbon tax that aims to lower greenhouse emissions. The Gillard administration even got the support of independent MP Tony Windsor after the Productivity Commission report.