Australian Stock Market Report – Midday 4-10-13

MID-SESSION REPORT
(12pm AEST)

The Australian sharemarket is slipping for the first time in three sessions, with the All Ordinaries Index (XAO) down 0.2 per cent to 4969.2. Both the ASX200 index and the All Ords are very close to cracking through the psychologically important 5000.0pt level. The indices haven't closed above that level in almost a month.

China's monthly trade data was issued moments ago. Imports are up 14.1 per cent YoY (over the past year), which is higher than most market forecasts. Exports rose less than expected while China only recorded a very modest US$0.88B trade surplus over March; significantly less than US$15.1B market forecasts. The Australian market hasn't reacted significantly so far.

The mining sector is playing the role of hero and helping to minimise market losses. The world's biggest mining company, BHP Billiton (BHP) and Rio Tinto (RIO) are both up around 2.5 per cent while iron ore miner Fortescue Metals (FMG) is gaining strongly. FMG is up for the fourth straight day, taking the gains for the week so far to 12.75 per cent. This is the best week (so far) for FMG since mid- Dec, however is still down 13.3 per cent this calendar year.

Most other sectors are struggling, with the major banks down by as much as 1.3 per cent at lunch. The Bank of Queensland (BOQ) has announced the $40M acquisition of Virgin Money Australia. This in a bid to expand its client base. Under the deal, BOQ will be paying an ongoing royalty to the Virgin Group however will have exclusive use of the brand for the next 40 years.

Surfwear retailer Billabong (BBG) is down 25 per cent after resuming trade for the first time since 28 March. This after receiving a reduced 60c/s takeover offer from a consortium led by former U.S. boss, Paul Naude. BBG is having its worst day since mid-2012, when its shares fell 34 per cent.

A report issued by Westpac has shown that Australians are 5.1 per cent more pessimistic about their finances this month than in March. This has pushed the Aussie dollar a touch lower however confidence is still up 5 per cent over the past 4 months.

871M shares have been traded so far today, worth $2.3B. 412 stocks are higher, 388 are down and 287 are unchanged.

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