MID-SESSION REPORT
(12.30pm AEDT)

The local markets has done it all in the first half of the session, with stocks down by as much as 0.5 per cent early on, trading flat more recently and currently up by just a few points at lunch. The All Ordinaries Index (XAO) is up by around 0.2 per cent.

What makes this impressive is that the US political circus continues. Yesterday's excitement of an imminent solution on the debt ceiling resolution and the reopening of the US government (now shut for 15 days) has died down. Fitch, one of the big three ratings agencies put the US AAA credit rating on 'rating watch negative'. This implies that there's a 50/50 chance of a credit downgrade (according to Fitch).

The mining sector is to thank for a good portion of today's gains, with the S&P/ASX 200 Materials Index (a measure of mining sector performance) up 0.71 per cent at lunch. Rio Tinto's solid quarterly production numbers yesterday is helping lift its shares by a further 1.2 per cent (up 2.5 per cent yesterday). The larger BHP Billiton (BHP), which issues its September quarter production figures on 22 October, is up 1.1 per cent. Iron ore producer, Fortescue Metals (FMG) is up 3 per cent.

The Annual General Meeting (AGM) season continues, with a number of well-known names speaking with investors. Biopharmaceutical firm, CSL Limited (CSL) is the biggest of the company's meeting shareholders. The blood products and vaccines maker announced a close to $1 billion buyback over the next 12 months due in part to slow growth.

The Australian dollar currently buys US95 cents and has been a big winner in recent weeks with the US debt ceiling remaining a concern. Only a week ago, one Australian dollar was buying US94.4 cents and US93.8 cents a week earlier. The longer the negotiation deadlock continues in the US, the longer the Australian dollar is likely to remain strong.

No major economic news is issued in Australia or the region today. A public holiday in India will keep its market closed.

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