Australian Stock Market Report – Midday 12/12/13

AUSSIE MID SESSION REPORT (12Noon AEDT)

After the US markets sold off again overnight it was good to see the Aussie market holding up well at the start of trade.

All Ordinaries Index started only 4pts lower and regained momentum as the morning went on before turning lower just after 11am AEDT.

At lunch time the All Ordinaries Index was off 46pts
Overnight US investors turned the focus back on the US Federal Reserve (Central Bank) and when they will plan to remove stimulus from the US economy. This change in focus occurred after 2 large items were ticked on the US government Christmas wish list: the signing of the 2 year bipartisan budget deal budget spending that will prevent another government shutdown in early 2014 and the implementation of new banking reforms (The Volcker rules).

Sector on the market were mixed thru the early session with some odd standout like gains in small telecommunication stocks and a mixed bag for the insurers. Telecom Corporation of New Zealand Limited (TEL) up over 3% and Tpg Telecom Limited (TPM) up 2.8% while rival Telstra Corporation Limited (TLS) down slightly.
In the insurance space QBE Insurance Group Limited (QBE) still continues to lose ground after its write-down on its US assets earlier in the week, QBE off 4.7%. Suncorp Group Limited (SUN) up 0.2%.

The Miners are lower even with base metals lifting overnight on the LME and the banks have lost more ground as the morning kicked on. BHP Billiton (BHP), Rio Tinto (RIO) and Fortescue (FMG) all lower. Incitec Pivot Limited (IPL) higher up 1.7%. Oz Minerals (OZL) rebounding today after yesterday falls off 14% on cuts to its CY14 copper production forecast now up 9%.

Gold and energy stocks continued to slide after small cuts in prices overnight. Oil Search Limited (OSH) off 2.23% and Woodside Petroleum Limited (WPL) off 0.6%.

Other stocks listing large changes - Brambles Limited (BXB) off 2.3% and its document spin off Recall Holdings Limited (REC) off 1.6%.

We have just received the November job data from the Australian Bureau of Statistics (ABS). The numbers were higher than expected with Australian employment rising by 21,000 in November when the market expected a 10,000 lift and we here at CommSec were only looking for a 5,000 job gain. But we did see the jobless rate lift from 5.74% to 5.76% - so it is being rounded up to 5.8%.

Aussie dollar rises from US90.43c to US90.71c after jobs data then at lunch the Australian dollar came back down to US90.34.

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