Australian Stock Market Report – Midday July 24, 2014

A man walks past an HSBC branch along a main street in Manila July 1, 2014. A planned law allowing foreign firms to take full control of Philippine lenders is drawing eager suitors to the sector, including Japan's Mitsubishi UFJ Financial Group and Malaysia's CIMB Group Holdings, bankers familiar with the matter say. The Philippine law would replace a cap of 60 percent on foreign ownership and abolish previous rules that allowed just 10 foreign banks in the country. Already passed by Congress, it awaits the approval of President Benigno Aquino, who has flagged this is likely to come soon. Picture taken July 1, 2014. REUTERS/Romeo Ranoco (PHILIPPINES - Tags: BUSINESS)

The Australian market opened stronger today as expected and by lunch the market had been boosted by the better than expected "Flash" Chinese manufacturing data for July. The HSBC China flash Purchasing Managers' Indexes (PMI) for July hit a 18month high up 52.0 boosted by new orders up from 50.7 points in June and better than the BLOOMBERG market survey expected of 51.0.

After a mixed night on the US market the Aussie market did lift but not by as much as we had expected. US share markets were mixed on Wednesday with biotech stocks amongst the biggest gainers. The Nasdaq Biotech index jumped 1.9%. Tensions in Ukraine and the Gaza strip kept a lid on gains.

By lunch the All Ordinaries index was up only 0.6 of a point. The banking stocks were mixed and the mining sector held back by the building materials sub index, with Boral Limited (BLD) and James Hardie Industries PLC (JHX) lower and Newcrest Mining (NCM) our largest listed gold miner failing.

Newcrest told the market today it had beaten its own gold and copper production targets for the year. But NCM warned it will be posting asset impairments in its next result from between $1.5 to $2.5Billion for FY14, when it reports next month. NCM share price fell on this news down over 4.5%. OceanaGold Corporation (OGC) off 6.2%. Small cap, gold miner Timpetra Resources Limited today announced that it has sold approximately 80% of its holding in Saracen Mineral Holdings Limited (SAR) share price has fallen 7.8% on this news. Overnight the US$ gold prices eased, with the COMEX gold futures quote down again in Asia trade off by US$4 or 0.27% to US$1,302 per ounce.

Also in the mining sector Fortescue Metals Group Ltd (FMG) fell in early trade while Atlas Iron Limited (AGO) lifted after reporting its quarterly results. The output was strong and they did not release any FY guidance.

The concern for Atlas investors next year will be cash flow which is currently, and is expected to stay, under pressure. AGO share price up over 3%. The US$ oil price also fell in Asian trade now down US$0.05 to US$103.07 a barrel.

Today the insurance sector moved higher after Insurance Australia Group (IAG) upgraded its full year profit margin expectations to 18%-18.3%verses IAGs prior guidance of 14.5%-16.5%. IAG is confident or the list after the amount the company has paid out in natural peril expenses in the second half of the year was lower than expected. IAG also lifted its expectations for Gross Written Premium (GWP) up near 3% this lifted the share price higher up 1.7%.

Macquarie Group Limited (MQG) held its AGM today and the company also released its 1Q15 results. MQG told the market it expects its full-year profit in FY15 to be broadly in line with the previous year and said in the first quarter of FY15 its operating groups' contribution was down on the last quarter and this time last year. MQG did say that its funded balance sheet remains strong but the shares fell away in early trade now down 2.25%.

And the Australian dollar lifted after the Chinese PMI read now holding at AUD/USD 0.9462.