Australian Stock Market Report - Midday 2/10/2012

MIDDAY REPORT
(12pm AEDT)

Australian stocks are trading lower in the early session, as investors focus on the local reporting season rather than positive offshore moves. US and European markets moved higher overnight after Greece reached a new deal to secure additional funding. At lunchtime in the East, the All Ordinaries Index (XAO) is down 19pts or 0.5pct to 4337.4.

Investors have had the first chance today to respond to Rio Tinto's (RIO) Full Year result, which was released after the bell yesterday. RIO reported an 11.2pct increase in FY underlying profit to US$15.54 billion, broadly in line with consensus. However, net profit fell 59pct due to a one-off write off of RIO's aluminium business. Shareholders will receive a final dividend of US91c per share. RIO shares are down 2.2pct at lunchtime in the East to $70.01.

Meanwhile, Australia's largest listed gold producer Newcrest Mining (NCM) has reported a 50pct increase in 1H profit to a record $659 million, thanks to stronger gold prices. Shares in NCM are firmer by 3pct to $34.43.

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Shares in the Ten Network (TEN) are slightly lower at 88.75c. It has been announced today that NewsCorp (NWS) board member Lachlan Murdoch will become Ten's new Chairman. NWS shares are down 2pct to $18.51.

Transfield Services (TSE) shares are up 9.4pct to $2.15 after the company announced its annual profit will meet expectations, although it is expected to come in at towards the bottom end of guidance.

The Australian dollar is buying US107.6c, £0.6805 and €80.98c.

Juliette Saly, CommSec Market Analyst

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