MIDDAY REPORT (12pm AEST)

The Australian sharemarket is gaining for the second straight day with the ASX 200 index (XJO) up 0.5 pct or 20.5 pts to 4025.1 while the broader All Ordinaries index (XAO) is also 0.5 pct or 22.2 pts higher to 4085.7. Shares improved by 3.5 pct yesterday, breaking three consecutive sessions of losses.

Overnight, both the U.S and European markets rose by as much as 5.7 pct with the Eurozone's largest economies, France and Germany the standouts. Germany's Chancellor, Angela Merkel has said that she will give all necessary assistance to Greece. Greek Prime Minister, George Papandreou won parliamentary backing for a property tax to meet the necessary deficit reduction targets imposed on the struggling Eurozone nation.

Close to all sectors are improving, with the S&P/ASX 200 Energy sector up 1.37 pct or 166 pts to 12288.8 with Woodside Petroleum (WPL) up 1.94 pct or 60 cents to $31.45 while the smaller Santos (STO) is 1.27 pct or 14 cents higher to $11.17.

Commodity prices rose strongly, with the price of gold up more than 3.5 pct and gains of as much as 7.7 pct were recorded amongst base metals overnight. Australia's second largest miner, RIO Tinto (RIO) is up 1.66 pct or $1.05 to $64.45 while index leader BHP Billiton (BHP) is 1.02 pct or 36 cents higher to $35.71. BHP is four times as large as RIO in terms of its size on the ASX.

The big four banks are mixed, with Westpac (WBC) up 1.14 pct or 23 cents to $20.48 while National Australia Bank (NAB) is 1.07 pct or 24 cents higher to $22.62. ANZ Banking Group (ANZ) is 0.2 pct or 5 cents stronger to $19.75 and Commonwealth Bank of Australia (CBA) is currently flat.

One of the world's largest agricultural chemical companies, Nufarm (NUF) is scheduled to release its full year profit results today. NUF is gaining by 3.31 pct or 14 cents to $4.37 ahead of the report.

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.

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 Japan's Nikkei 225 index up 0.29 pct or 24.67 pts to 8634.62 while China's Shanghai Composite index is 0.41 pct or 9.82 pts higher to 2424.88. Hong Kong's Hang Seng is down 1.4 pct or 253.88 pts to 17876.67.

The latest monthly report on newly built home sales was released this morning. The number of new home sales rose by 1.1 pct in August, rising from a 10 year low. Sales had fallen by close to 17 pct over June and July. Commsec's Chief Economist, Craig James said that "Aussie consumers and home-buyers remain super-cautious and that mood is continuing to constrain activity for retailers and housing-dependent businesses. Anecdotally the recent drop in fixed term interest rates is boosting enquiry levels in the housing market, but it is yet to show up in the data."

So far today, 1.01 billion shares have been traded worth $2.51 billion. 586 shares are up, 233 are lower and 316 are currently unchanged.

One of the better performing stocks today (in percentage terms) is Ivanhoe Mines (IVA), which is up 6.54 pct or 7 cents to $1.14. Yesterday, RIO lifted its stake in the Canadian mining company to 49 pct, costing RIO close to CA$73.1 million. The Australian dollar is currently at parity with the Canadian dollar.

The Australian dollar (AUD) has continued to remain volatile with the AUD cracking the US99 cent mark overnight, only to fall back to US98.7 cents at lunch. Five years ago the Aussie was only buying US74.5 cents.

Have a great day.

Steven Daghlian
Commsec Market Analyst