Australian Stock Market Report – Midday 2/6/2013

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By Steven Daghlian, CommSec Market Analyst | February 6, 2013 1:31 PM EST

MIDDAY REPORT
(12pm AEDT)

The Australian sharemarket is back in the black following two straight sessions of weakness. The All Ordinaries Index (XAO) is up 0.8 per cent or 40.6 pts to 4943.2. This is the 12th time in 15 sessions that local shares are improving.

It is no big surprise that most sectors are higher since the major European and American markets posted healthy gains overnight. This partly made up for the hefty losses recorded on Monday night. Economic news was mostly positive overnight, with the services industry extending a three-year expansion while home prices are climbing at the fastest pace in over six years in the U.S. Around 70 per cent of businesses that have announced profit results in North America have beaten market expectations also.

Locally, the defensive telecommunications sector is the lone loser, with Telstra (TLS) down 0.87 per cent or 3.5 cents to $4.58. TLS is still up 4.81 per cent since the start of January and is adding to 2012's impressive 31 per cent rise.

The earnings season is now underway, with services company to the medical industry, Primary Health Care (PRY) announcing a $69.5 million profit between July and December last year. Revenue was lower than expected, however PRY shares are up 2.78 per cent or 12 cents to $4.61. Inner ear implant manufacturer, Cochlear (COH) is down another 3.95 per cent following yesterday's profit numbers which resulted in a 9.3 per cent slide in its share price.

Tomorrow should be busier on the earnings front with Telstra (TLS), Newscorp and Webjet set to announce their profit results.

The big four banks are currently contributing most substantially to the gains, with gains of as much as 1.31 per cent being recorded at lunch. ANZ Banking Group (ANZ) is best, with Westpac (WBC) up 1.18 per cent or 33 cents to $28.25, National Bank (NAB) is up 1.08 per cent or 29.5 cents to $28.09 and Commonwealth Bank (CBA) is 0.68 per cent or 44 cents higher to $64.74.

The major miners are also mostly higher, with BHP Billiton (BHP up 0.54 per cent or 20 cents to $37.38 while the smaller Rio Tinto (RIO) is 0.77 per cent or 52 cents stronger to $67.83.

The retailers are holding up well despite a slide in retail spending in December. Spending slipped by 0.2 per cent over the month, which has resulted in Aussie dollar weakness in the early afternoon. JB Hi-Fi (JBH) is up 4.59 per cent or 47 cents to $10.70.

Following the start of daylight savings in October, major markets in the region will be trading between the hours mentioned below until April 2013.

The Hong Kong sharemarket trades in two sessions each day and will now open for trade between 12.30pm (AEDT) and 3pm (AEDT) while the second session is between 4pm (AEDT) and 7pm (AEDT).

Out of Japan, the first session will be between 11am (AEDT) and 1pm (AEDT) while the second session is between 2.30pm (AEDT) and 5pm (AEDT).

The Singapore exchange will be open for trade between 12pm and 3.30pm (AEDT) for the first session and then between 5pm and 8pm (AEDT) for the second.

U.S futures are currently pointing to a slightly stronger start to trade tonight. The U.S market trades between 1.30am (AEDT) and 8am (AEDT).

So far in trade at lunch, 985 million shares have been traded worth just $1.93 billion. 501 shares are up, 319 are lower and 290 are currently unchanged.

The Australian dollar (AUD) buys US103.5 cents, €76.2 cents and £66.1 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.

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