Australian Stock Market Report - Midday 2/29/2012


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(12pm AEDT)

The Australian share market has started the day's trade on a positive note, after the US Dow Jones Index closed above the 13,000 point level overnight for the first time since May 2008. In early trade, the All Ordinaries Index (XAO) is up 27.7pts or 0.6pct to 4378.9.

Financial stocks are moving higher by 0.6pct, with shares in the National Australia Bank (NAB) the strongest out of the big four, up 1.2pct to $23.56.

Among mining stocks, BHP Billiton ( BHP )is supporting the materials sector, firmer by 1.3pct in early trade to $36.23.

Australia´s largest electrical retailer Harvey Norman (HVN) has today reported a 2pct fall in first half earnings. Net profit after tax for the six months to December 31 2011 came in at $128.95 million, above expectations, however analysts say the result was overstated due to a tax benefit. Investors have responded poorly to the result, in part due to a dramatic 6pct fall in like for like sales in the period. HVN has blamed price deflation, strong competition, falling consumer sentiment and the high Australian dollar for the result. Earnings were also impacted by the closure of seven Clive Peeters and Rick Hart stores, coupled with the transition of re-branding another 18 stores to the Harvey Norman and Joyce Mayne franchises. HVN has already flagged the restructure (sale) of the Dick Smith Brand, but says it is positioned for growth in Slovenia and Croatia. HVN is also building a new homemaker centre in Maroochydore, Queensland. Shareholders will receive a 5c interim dividend, below expectations and the previous payment. HVN shares are down 6pct in early trade to $2.03.

In the energy sector, WorleyParsons ( WOR ) has also reported today, coming in with an 18pct rise in first half profit to $152 million. WOR shares are down 3.4pct in early trade to $28.79.

The Australian dollar is stronger; at US107.98c, £0.6783 and €80.15c.

Juliette Saly, CommSec Market Analyst

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing Commodities
Referenced Stocks: BHP , WOR

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