Australian Stock Market Report: Lunch Report

The All Ordinaries Index (XAO) dropped 2.16pct or 100.6pts yesterday in a board base sell off. The benchmark S&P/ASX200 index opened higher this morning at noon the index was up lower as expected by noon the index off 0.26 pct or 12pts, to 4,552, while the broader All Ordinaries index up by 0.3pct or 14points, to 4,560.

Volumes have been very low today especially with the Melbourne Cup holiday in Melbourne and the market awaiting the outcome of the Reserve Bank of Australia's interest rate decision due at 2.30pm (AEDT). Commsec expects a rate hike of a quarter of a percent today taking the cash rate to 3.50%. We feel rates are rising because interest rates need to gradually lift to more normal levels in line with economic growth, not because the inflation figures are a concern.

Department store owner, MYER (MYR) opened 2.67pct higher to $3.85. After its weak first day of trading on the exchange yesterday where the shares closed at $3.75 off 8.54 pct. Myer leading competitor in the space David Jones Limited (DJS) up 1.7pct to $5.34. Wesfarmers (WES) up 4cents to $27.24, with Woolworths (WOW) down 0.06 pct to $28.06.

At noon the financial sector off 0.02pct. National Australia Bank (NAB) off 0.97pct to $28.62, Commonwealth Bank of Australia (CBA) up 0.27pct to $51.05. QBE Insurance Group (QBE) shares off 2.66pct to $21.56, after yesterday's news that the lead insurer cut its expectations for insurance revenues in 2009.

The industrial sector rebounded from yesterday's losses, the sub index up 0.6pct at noon. Macmahon Holdings Limited (MAH) has extended its memorandum of understanding (MOU) - their standing agreement - signed in November 2007, with Leighton Holdings over integrated partnerships that allows Macmahon greater access to large infrastructure projects. Mac Mahon also agreeing to remove the clause where Leighton needs to obtain Macmahon's written consent before extending its shareholding beyond 19.9 per cent. This could mean Leighton could lift its holding and go for a full takeover of the firm. Leighton Holdings Limited (LEI) up 0.7pct or $0.26 to $34.61, Macmahon's up 4.6pct to $0.56. Toll Holdings Limited (TOL) up 1.9 pct to $8.30 and Asciano Group (AIO) up 3.3pct to $1.55.

The Consumer discretionary sector up slightly adding 0.57pct. Television and entertainment firm, Seven Media Group (SEV) yesterday released its full year account. Seven cut the value of its television network by $1.5 billion, listing a $1.9 billion annual loss. Seven shares up 1cent to $ 6.30. Ten Network Holdings Limited (TEN) up 2 cents to $1.52.

The Property sector helped higher today by the better than expected US pending home sale data. GPT Group (GPT) up 3.4pct to $0.60, and Westfield Group (WDC) off 1.22pct to $12.19. Stockland Group (SGP) up 1.8pct to$3.83.

The Materials sector working away in the back ground today. Base metal prices were mixed on the London Metal Exchange on Monday. Zinc rose by 1.7pct with copper up 1.2pct but nickel lost 1pct. Rio Tinto (RIO) up 1.2pct to $63.57, BHP Billiton (BHP) up only 0.05pct to $36.73.

The price of gold rose in late trade on Monday as the US dollar lost ground and US fund managers established fresh positions. The Comex quote was up US$13.60 an ounce or 1.3pct to US$1,054.00. Lihir Gold Limited (LGL) up 2.6pct to $3.12. Newcrest Mining Limited (NCM) up 3.8pct to $33.34.

Energy stocks limiting early gains the sub index up 0.2pct. Crude oil prices rebounded on Monday in response to strong global manufacturing data. The Nymex oil contract rose by US89c or 1.2pct to US$77.89 a barrel. And London Brent crude rose by US$1.11 to US$76.31 a barrel. Woodside Petroleum Limited. (WPL) down 1pct to $47.77. Origin Energy Limited (ORG) off 1.3pct to $15.76.

Telstra Corporation Limited (TLS) shares flat pct to $3.24.

And 1 Australian dollar will buy US90.72c and €61.35c.

In the US tonight we get the release of factory orders and car and truck sales, and the Federal Reserve begins a two-day meeting. Also tonight quarterly results from Kraft, MasterCard and Viacom.

Provided by Comsec.com.au