Australian Stock Market Report – Midday January 8, 2015

IN PHOTO: Office workers are reflected as they walk past the Australian Securities Exchange building in central Sydney April 8, 2011. Singapore Exchange Ltd has terminated its $8 billion bid for Australia's ASX Ltd after the Australian government formally rejected the offer on national interest grounds and said changes to the country's financial systems were needed before the bourse could be bought by foreigners. REUTERS/Daniel Munoz

 Australian shares are improving after two days of weakness. The ASX 200 Index is up 0.3 per cent following the first rise in US stocks in six sessions and a firmer oil price.

 Economic news overnight was better than expected with a smaller than forecast US trade deficit and better outcome for private sector jobs creation catalysts for the gains. The euro zone's unemployment rate remained steady at 11.5 per cent.

 Mining stocks are up 0.8 per cent with BHP Billiton (BHP) improving for the first time this week. Australia's third largest company is up 0.5 per cent; however is still down 4 per cent over the past three days.

 Energy companies are interestingly the lone losers at lunch despite a 1.5 per cent rise in the oil price. Woodside Petroleum (WPL) is down 0.5 per cent while Santos (STO) is 1.6 per cent lower. Note that the price of oil has slipped by 15 per cent in just two weeks and has halved in value since July 2014. The weakness in oil was accelerated by OPEC's decision to maintain oil production at the same pace a little over a month ago.

 Qantas's (QAN) biggest shareholder 'Franklin Resources' has reduced its stake in the airline from 15.4 per cent to 14.22 per cent. Franklin is perhaps benefiting from the doubling in its share price in just six months. Many airlines have been helped by lower jet fuel costs. QAN is down 1 per cent.

 Major banks are up by as much as 0.7 per cent, with the big four accounting for around a third of the market's improvements.

 Home building remains healthy according to the latest report on building approvals. New dwelling approvals have jumped by 7.5 per cent in November with the number of approvals granted to apartment developers rising by 16.7 per cent. This reading is very volatile and swings significantly from month to month.

 Volume is a little light with 642.8m shares traded worth $1.5bn. 403 stocks are up, 315 are down and 274 are unchanged.

 The Australian dollar has strengthened following the better than expected building approvals and now buys US$0.809, €0.683, ¥96.7 and £0.536.

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