Australian Stock Market Report – Midday 2/8/2013

MID-SESSION REPORT
(12.30pm AEDT)

The Australian sharemarket is improving for the third consecutive session, with the All Ordinaries Index (XAO) up 0.2 per cent or 11.6 pts to 4967.4, despite a slow start to this morning. Over the past five trading sessions, the XAO has edged higher by almost 0.5 per cent. If the market can maintain its gains for the duration of the session and economic news out of China doesn't disappoint this afternoon, this will make it four consecutive weeks of improvement.

Last night, most global markets ended in the red due to comments by the European Central Bank's head, Mario Draghi. Mr Draghi, who is also known as Super Mario essentially reminded markets that the European economy is likely to remain weak over the early part of the year. Shares in both Germany and France are now trading in the red for 2013, while shares in both Australia and the U.S are now around 6 per cent higher.

The first week of the earnings season is now coming to a close locally, however today, we heard from Newcrest Mining (NCM). Its Net Profit After Tax (NPAT) fell by 51 per cent to $320 million, however the market was already bracing itself for a negative result. NCM shares are up 3.66 per cent or 85.5 cents to $24.21, taking the gains for the year to 9.24 per cent.

Vodafone Australia has had a 16 per cent slide in sales over the last three months of 2012 due to the loss of 64,000 customers over the quarter. This compares to Telstra (TLS) adding 607,000 new mobile phone customers between July and December. Vodafone has made an effort to improve its network to slowdown the loss of clients however is still in a weak position.

The major banks are helping to keep the market positive today, with ANZ Banking Group (ANZ) up 1.13 per cent or 31 cents to $27.82. Westpac (WBC) and National Bank (NAB) are both up a little more than 0.5 per cent whereas Commonwealth Bank (CBA) is up 0.19 per cent or 11 cents to $64.79.

The major miners are also trading in the black, with BHP Billiton (BHP) up 0.13 per cent or 5 cents to $37.70 while the smaller Rio Tinto (RIO) is higher by 0.71 per cent or 48.5 cents to $69.16.

Economic news out of China is due for release shortly and could have an impact on the local market.

Looking ahead to tonight, the European Union Economic Summit continues while both German and American trade balance reports will be issued also.

Following the start of daylight savings in October, major markets in the region will be trading between the hours mentioned below until April 2013.

The Hong Kong sharemarket trades in two sessions each day and will now open for trade between 12.30pm (AEDT) and 3pm (AEDT) while the second session is between 4pm (AEDT) and 7pm (AEDT).

Out of Japan, the first session will be between 11am (AEDT) and 1pm (AEDT) while the second session is between 2.30pm (AEDT) and 5pm (AEDT).

The Singapore exchange will be open for trade between 12pm and 3.30pm (AEDT) for the first session and then between 5pm and 8pm (AEDT) for the second.

U.S futures are currently pointing to a slightly weaker start to trade tonight. The U.S market trades between 1.30am (AEDT) and 8am (AEDT).

So far in trade at lunch, 778 million shares have been traded worth just $1.66 billion. 434 shares are up, 388 are lower and 299 are currently unchanged.

The Australian dollar (AUD) buys US102.6 cents, €76.6 cents and £65.3 pence.

The AUD is the world's fifth most traded currency behind the U.S dollar, the Euro, Japanese Yen and British Pound. The AUD accounts for around 7 pct of all foreign exchange trades.

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