Australian Stock Market Report – Midday 11/29/13

MID-SESSION REPORT
(12.30pm AEDT)

The Australian sharemarket is slipping for just the second time this week in light trade due to the Thanksgiving holiday in the US last night. The miners have been underperformers this week (down 1 per cent while the broader market is down by around 0.5 per cent) however are the sole improvers at lunch.

Graincorp (GNC) is down by 21 per cent following Treasurer Joe Hockey's decision to reject US food giant Archer Daniel Midland's $3.4 billion takeover bid of the Australian grain handler. Mr Hockey determined the acquisition of GNC to be contrary to the national interest. Approximately 85 per cent of eastern Australia's bulk grain exports are handled through GNC's port network.

Australia's second largest miner, Rio Tinto (RIO) is up 2.5 per cent following its decision to suspend alumina production at its Gove refinery in the Northern Territory. RIO earns the lion's share of its earnings from the production and sale of iron ore.

Qantas (QAN) is down by 1.02 per cent after recording its best gain in 1.5 months yesterday. Australia's largest airline announced a 3.2 per cent rise in passenger numbers over the year. Treasurer Hockey yesterday mentioned his openness to loosening current restrictions on foreign ownership of QAN - which is currently capped at 49 per cent.

Oil prices are falling for the third straight month, slumping by 4.3 per cent since the start of November. Crude eased overnight from the higher than expected inventories in the US, the recent nuclear agreement between Iran and the West together with US dollar strength.

The banks are in the red after outperforming the market this week. Westpac (WBC) is down 0.85 per cent, Commonwealth Bank (CBA) is 0.62 per cent loser, ANZ Banking Group (ANZ) is 0.37 per cent lower and National Australia Bank (NAB) is easing by 0.12 per cent. The financial sector is up by more than 20 per cent for the second year in a row however.

965 million shares have changed hands, worth $3.58 billion. 327 stocks are higher, 462 are in the red and 302 are unchanged.

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