Australian Stock Market Report – Midday 7/4/2012

LUNCHTIME REPORT
(12.40am AEST)

Overnight overseas markets gained across the board after better than expected factory orders in the US and strong auto sales for the month of June. The US market closed early ahead of the July 4 Independence Day holiday. Commodity prices rallied higher and the Aussie dollar also gained.

At the open of trade today the All Ordinaries Index (XAO) moved 25 points higher. By lunchtime the market had gained more ground, the All Ordinaries Index up 32 points. The market was helped by the news that the ASB May retail sales result was better than the market had expected up 0.5%. The retail sales numbers helped lift the consumer stocks. The S&P/ASX 200 Consumer Staples sector up 0.77%, while the S&P/ASX 200 Consumer Discretionary sector was a tab lower off 0.02%.

The big players in the retail space, Wesfarmers Limited (WES) and Woolworths Limited led the charge higher. Wesfarmers climbed 1.1% to $30.16 and Woollies up 0.9% to $26.95. Metcash Limited (MTS) also feeling the joy up over 0.9%. While GrainCorp Limited (GNC), one of Australia's largest grain handlers, fell 1.97% and Coca-Cola Amatil Limited (CCL) lost a few cents per share.

The S&P/ASX 200 Energy moved higher this morning, helped by a stronger US$ oil price overnight. The US$ oil price came off a few cents in morning trade but was still above US$87.50 a barrel. Energy stocks moved higher, shares in Santos Limited (STO) regained yesterday's losses up over 2.4% to $10.96 and Woodside Petroleum Limited (WPL) also higher, up by 2.2pct to $31.95.

It was a big morning for Origin Energy Limited (ORG) after announcing it had been given approval to put more cash into its joint venture LNG project in Queensland. The joint venture project is with US operator ConocoPhillips (COP) and it is now set to cost $23 billion. Today Origin said the company plans to fund the increased with existing debt and cash and not hit the market up for any more money. ORG share price moved higher, up 4.46% to $12.88.

Our big name miners did well this morning, The S&P/ASX 200 Materials sector added over 2%. After solid gains in base metal prices on the London Metals Exchange (LME) and a big lift in the gold price in the US and UK trading sessions. US$ gold rose US$20 an ounce to US$1,620 an ounce. Australia's largest listed gold miner, Newcrest Mining Limited (NCM) rallied higher up 2.9% to $24.20 and Kingsgate Consolidated Limited (KCN) up 5.3% to $5.32, while St Barbara Limited (SBM) up 1.5% and its planned merger partner Allied Gold (ALD) up 0.92%.

Large global miners, BHP Billiton Limited (BHP) added over 2% to $32.47 while rival in the iron ore space Rio Tinto Limited (RIO) added 2.3% and Copper and gold producers, OZ Minerals Limited (OZL) added 4.45 % and PanAust Limited (PNA) also higher, up 1.8%, and Fortescue Metals Group Limited (FMG) up 1.8%.

Banking stocks started off well but by lunch the gains were cut away. Commonwealth Bank of Australia (CBA) was the best of the big 4 banks up over 0.5% to $53.59, while Westpac Banking Corporation (WBC) fell into the red off 0.3%.

Elsewhere in the market, News Corporation (NWS) share price under pressure in early trade, off 1.48% to $21.94. Telstra Corporation Limited (TLS) off 0.4% to $3.71 and AGL Energy Limited (AGK) up slightly, at 14.72.

Virgin Australia today released its preliminary operating statistics for the month of May 2012. It showed that domestic yield growth was in line with Virgins plans and passenger numbers had increased by 8.9% year on year. The Virgin share price lifted 0.67% to $37.75 cents. Virgin's rival Qantas Airways Limited (QAN) share price was flat at $1.10.

The Australian dollar (AUD) is buying US102.98 cents, and 81.77 euro cents.

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