Australian Stock Market Report - Midday 12/09/2011


The Australian sharemarket is losing ground for the third time this week with the All Ordinaries index (XAO) down 1.4 pct or 60 pts to 4278.9. No sectors are being spared from the selloff at lunch.

Uncertainty in the Eurozone continues to put downward pressure on sharemarkets around the world as the European leaders are in the midst of yet another two day meeting in Brussels.

The mining space is by far the biggest drag on trade with the world's largest miner BHP Billiton ( BHP ) down 2.6 pct or 96 cents to $36.03. RIO Tinto ( RIO ) is slumping by 3.16 pct or $2.09 to $64.00. BHP is amazingly more than four times as large as RIO.

All four major banks have now passed on the Reserve Bank's ( RBA ) latest rate cut in full. ANZ Banking Group (ANZ) which was the first major to cut rates is down 2.22 pct or 47 cents to $20.66, National Australia Bank (NAB) is 1.99 pct or 49 cents lower to $24.12, Westpac ( WBC ) is 1.58 pct or 34 cents lower to $21.18 and Commonwealth Bank of Australia ( CBA ) is 1.01 pct or 50 cents weaker to $49.18.

The retailers continue to struggle with the exception of discount retailer JB Hi-Fi (JBH) which is 0.19 pct or 3 cents higher to $15.86 however most of the other big players are falling in line with the broader market.

There are a few exceptions so far in trade however with investment manager AMP Limited (AMP) up 1.62 pct or 7 cents to $4.39. The reason for the gains is that Japan's largest financial company, Mitsubishi UFJ Financial Group said it would pay $425 million for a 15 pct stake in AMP.

This afternoon, China releases a number of economic reports which has the potential to impact markets in the region.

Following the start of daylight savings at the start of October, major Asian markets will be trading between the hours mentioned below until April next year (note that over the next month, some of the times might be slightly off due to several countries in the region changing their clocks at differing periods).

The Hong Kong sharemarket trades in two sessions each day and will now open for trade between 1pm (AEDT) and 3.30pm (AEDT) while the second session is between 5.30pm (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 (AEDT) and 3.30pm (AEDT) for the first session and then between 5pm (AEDT) and 8pm (AEDT) for the second.

Asian markets are mostly lower with Japan's Nikkei 225 down 1.8 pct or 156.05 pts to 8508.53 while South Korea's KOSPI index down 1.83 pct or 35.07 pts to 1877.32.

So far in trade at lunch, 894 million shares have been traded worth $1.5 billion. 222 shares are up, 544 are lower and 320 are currently unchanged.

The Australian dollar (AUD) is weaker and buys US101.7 cents.

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.

Steven Daghlian, 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.

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

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