MIDDAY REPORT
(12pm AEST)

As expected, the Australian share market is wiping out yesterday's falls with the All Ordinaries index (XAO) up 2.9 pct or 114.9 pts to 4042.5. Keep in mind that despite the improvement, the market locally has still lost ground for five of the past seven sessions.

The main reason for the gains today is the optimism that progress is being made on a potential solution to the European debt crisis. Nonetheless, it still seems that trading is being driven by speculation and emotion rather than on a solid action plan implemented by the world's largest economies.

Thankfully, following a 6.4 pct slump last week U.S shares managed to gain 2.5 pct overnight while European markets rose by as much as 3 pct. Mining, energy and financial stocks are pushing the market significantly higher after a tough start to the week on Monday.

The S&P/ASX 200 Materials index is up 4.17 pct or 438.4 pts to 10875.1, with the world's third largest miner RIO Tinto (RIO) up 4.9 pct or $2.95 to $63.15 while index leader BHP Billiton (BHP) is 3.45 pct or $1.17 higher to $35.13.

RIO has lifted its stake in Canadian mining company Ivanhoe Mines (IVN;cn) to 49 pct overnight, costing the company close to CA$73.1 million. The Australian dollar is currently at parity with the Canadian dollar.

Air New Zealand (AIZ) has increased its stake in Australia's second largest airline, Virgin Australia (VBA) to 19.99 pct to further its presence in the region. A company or investor must make a takeover bid if it would like to hold more than 20 pct of a public company. VBA shares are up 1.61 pct or 0.5 cent to 31.5 cents while AIZ is flat. Australia's largest airline, Qantas (QAN) is up 2.11 pct or 3 cents to $1.45.

Following the end of daylight savings in April this year, major Asian markets will be trading between the hours mentioned below until mid October.

The Hong Kong sharemarket trades in two sessions each day and will now be opening for trade between 11.30am (AEST) and 2pm (AEST) and then between 3.30pm (AEST) and 6pm (AEST) in its second session.

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Out of Japan, the first session will be between 10am (AEST) and 12pm (AEST), while the second session is between 1.30pm (AEST) and 4pm (AEST).

The Singapore exchange will be open for trade between 11am (AEST) and 2.30pm (AEST) for the first session and then between 4pm (AEST) and 7pm (AEST) in its second session.

The major Asian markets are mostly higher at lunch, with South Korea's KOSPI index up 3.48 pct or 57.56 pts to 1710.27, Japan's Nikkei 225 index is 1.63 pct or 136.52 pts to 8510.65, while shares in Hong Kong are up 2.23 pct or 388.19 pts to 17795.99.

Yesterday, the latest report from the Australian Institute of Petroleum (AIP) showed that the average price of unleaded petrol across the country fell by 0.9 cent to 143.6 cents a litre last week. Despite the fall, petrol prices are still trading around four month highs. If the Australian dollar (AUD) was still buying close to US110 cents (as it was at the end of July), you would expect to be paying around 13 cents a litre less at petrol bowsers.

So far today, 996 million shares have been traded worth $2.73 billion. 653 shares are up, 187 are lower and 283 are currently unchanged.

One of the better performing stocks today (in percentage terms) is Africa focused miner, Sundance Resources (SDL) which is up 11.11 pct or 4 cents to 40 cents. SDL was first listed in 1993 and has a market capitalisation (number of shares on issue multiplied by the current share price) of $1.17 billion.

The Australian dollar (AUD) has been volatile this morning, however at lunch buys US98.5 cents. (From Steven Daghlian Commsec Market Analyst)

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