Australian Stock Market Report – Midday 1/15/14

MID-SESSION REPORT
(1pm AEDT)

Local stocks are managing to partly make up for yesterday's 1.5 per cent slump; the single worst day for Australian equities in four months. The All Ordinaries Index (XAO) is back above the 5250.0 market, following hitting four week low on Tuesday; now improving by 0.7 per cent.

A rise was expected today, after American equities snapped a four-day losing streak overnight. U.S. economic news was upbeat, with a better than forecast rise in retail spending, while JP Morgan Chase (JPM;us) issued a slightly firmer than anticipated quarterly earnings result (after stripping out US$2.5 billion worth of legal fees linked with the Madoff Ponzi scheme).

Copper and gold miner, OZ Minerals (OZL) is surging by 15.31 per cent following its quarterly production numbers. Both copper and gold production levels slumped in 2013; however the South Australian focused miner announced no nasty surprises and reiterated its forecasts for 2014. OZL fell by 53 per cent last year, falling for the third consecutive year.

Iron ore has fallen below US$130/t overnight; a five-month low. China bought a record amount of ore last year and prospects for 2014 are looking relatively robust. Australia's third largest iron ore player, Fortescue Metals (FMG) is up 3.69 per cent, Rio Tinto (RIO) is 1.55 per cent firmer and BHP Billiton (BHP) is up 0.06 per cent.

The major banks are contributing most to the gains, with the big four adding 5.5pts to the All Ordinaries Index's strength.

On the economic front, lending finance and new car sales monthly readings were issued today. The results of the latest consumer confidence survey were scheduled for release today; however the reading has been pushed out by a week. Lending rose by 5.5 per cent in November (fastest annual pace in almost six years).

The Australian dollar has fallen back below US90c after hitting a high of US90.88c earlier this week. A number of Federal Reserve officials have reiterated their intention to continue tapering and together with solid U.S. economic news, the greenback has strengthened.

At lunch, 897b shares have changed hands, worth $1.7bn. 503 stocks are firmer, 294 are in the red and 335 are flat.

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