Australian Stock Market Report – Midday 10/15/2012
By Steven Daghlian, CommSec Market Analyst | October 15, 2012 1:30 PM EST
The Australian sharemarket has kicked off the day in the red, with the All Ordinaries Index (XAO) easing by 0.1 per cent or 4.1 pts to 4506. Most sectors are improving modestly; however not sufficiently to tip markets into positive territory. The mining companies are down by 1 per cent, being weighed down most by gold producer, Newcrest Mining (NCM) and iron ore company, Fortescue Metals (FMG).
The S&P/ASX 200 Materials index is down 1.01 per or 102.4 pts to 10010. Australia's biggest miner, BHP Billiton (BHP) is slipping by 0.89 per cent or 30 cents to $33.24 while the smaller Rio Tinto (RIO) is 1.15 per or 65 cents lower to $55.73.
The major banks are mostly stronger, with Westpac (WBC), National Australia Bank (NAB) and ANZ Banking Group (ANZ) all around 0.5 per cent higher. Commonwealth Bank of Australia (CBA) is flat.
Surfwear retailer, Billabong (BBG) slumped by 21 per cent last week after private equity business TPG withdrew its takeover offer for late last week. Today, BBG is down 1.2 per cent or 1 cent to 82.5 cents. BBG has slumped by 41 per cent since the start of January this year, adding to last year's 78 per cent plummet.
On the economic front, there was a much stronger than expected 4.7 per cent rise in the number of cars sold in September. The market was hoping for a 1.5 per cent lift in car sales. The August report on housing finance (home loans) was issued and recorded a 1.8 per cent jump in issued home loans over the month. This was broadly in-line with market expectations. The market is now factoring in an 80 per cent likelihood of an interest rate cut next month. The RBA rarely makes one rate cut without backing it up the very next month with another. Over the past five years the Reserve Bank has made 21 moves on rates and only on three occasions has it made a cut or increase for one month in isolation.
Looking back, last week the Australian sharemarket eased by just 0.08 per cent while American shares fell by 2 per cent. Both the World Bank and the International Monetary Fund (IMF) downgraded global growth forecasts. There were 14,400 jobs created last month while the unemployment rate rose from 5.1 per cent to 5.4 per cent which was a bigger than expected rise.
In Australia this week, Telstra, Newscorp and Cochlear are all scheduled to hold their Annual General Meetings (AGMs). Quarterly reports will be issued by Fortescue Metals (FMG), Rio Tinto (RIO), Woolworths (WOW) and Woodside Petroleum (WPL).
In the U.S, a few hundred companies will be announcing their third quarter earnings (profit) including McDonalds, Google and Microsoft.
In Europe, on Thursday the European Union Economic Summit will kick off and will be closely observed by investors.
U.S futures are currently pointing to a slightly lower start to trade tonight. The U.S market trades between 11.30pm (AEST) and 7am (AEST).
So far in trade at lunch, 908 million shares have been traded worth $1.09 billion. 360 shares are up, 420 are lower and 316 are currently unchanged.
The Australian dollar (AUD) is weaker and buys US102.2 cents, €79.1 cents and £63.7 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.
[Kick off your trading day with our newsletter]
More from IBT Markets:
Follow us on Facebook
Follow us on Twitter
Subscribe to get this delivered to your inbox daily
Most Popular Slideshows
- Taylor Swift Named Forbes' Second Highest Paid Country Musician [PHOTOS]
- Forever Lost: Indescribable Anguish for Malaysia Airlines MH17 Families, Remains of Some Victims May Never Be Found (PHOTOS)
- Global Aviation Accidents: UN to Form Safety Task Force, Gov'ts Should Share Intelligence Info to Avert Future Incidents on Flying Over Warzones (PHOTOS)
- PageSix: Beyonce & Jay Z Union is Not About Love, All About Business & the Brand
Join the Conversation
- South Australia OKs $800M Copper, Gold & Iron Ore Mine on Prime Agri Land in Yorke Peninsula
- Australian Stock Market Report –Midday July 30, 2014
- Shanghai Stock Exchange Will Not Extend Trading Hours
- Long Beach Real Estate Market Is Pricing Out Home Buyers with Limited Budget
- Australian Stock Market Report –Afternoon July 30, 2014
- Samsung Galaxy S5 Alpha Leaks Online: Release Date, Five Features to Wait for New Smart Phone
- Photos of Motorola Moto X+1 Prototype and Specs Leak Online, Release Date, Four Fresh Features Revealed
- Sony Xperia Z3: Release Date, Five Features to Expect from New Android Smart Phone
- Freshly Leaked Apple iPad Air 2 Cases Confirm Touch ID Sensor; Release Date, Limited Specs and Price Listed
- Top Surprising Features Of iOS 8
- Top 4 Reasons Why iPhone 6 Will Hit Big Soon After its Sept 2014 Release Date
- Twin Malaysia Airlines MH370, MH17 Aviation Disasters Create Phobia Among Travellers