Aussie shares are stronger at midday led by gains in financial stocks, however news that top telco Telstra may have to split its businesses is limiting gains.
The S&P/ASX200 index is up 20 points at 4,551 and on the futures market the SPI 200’s up 26 points.
In economic news: The ABS released figures showing a 3.7 per cent fall in dwelling unit starts for the second quarter.
Making headlines at midday: Telco Telstra Corporation Ltd (ASX:TLS) is facing a break-up of its businesses after Senator Stephen Conroy announced historic reforms to the regulation of the telecommunications industry. The Minister for Broadband, Communications and the Digital Economy says the reforms will drive future growth, productivity and innovation across all sectors of the economy. Mr Conroy says the reforms address the structure of the telecommunications market and provide Telstra with the flexibility to choose its future path. He says it is the Governments clear desire for Telstra to structurally separate on a voluntary and co-operative basis. Mr Conroy says if Telstra chooses not to structurally separate, the legislation provides for the Government to impose a strong functional separation framework on Telstra. Telstra shares fell 4.31 per cent to $3.11.
Global mining giant BHP Billiton Ltd (ASX:BHP) says it expects to see a more predictable demand for its products but does not expect a return to the same levels seen before the global financial crisis. CEO Marius Kloppers says the major economies are starting to rebuild their inventories in sequence, led by an early recovery in China, and the company sees a more predictable demand scenario for its products in the coming financial year. Mr Kloppers says BHP does not expect to return to the same buoyant demand conditions that prevailed before the global financial crisis, or a return to record global growth rates within its forecasting horizon. He says reductions in lending controls in China has seen an increase in construction and demand for BHP products. Mr Kloppers also says stimulus measures to improve China’s rail, road and air transport links will create a need for raw materials. BHP shares rose 1.24 per cent to $38.31.
Turning now to market indices: The best performing sector at midday in is the Consumer Discretionary index up 20 points to 1,547. Shares in Austar United up 7.14 per cent at $1.275. Shares in Retail Food Group and Harvey Norman are also higher at noon.
The worst performing sector at midday is the Telco Services index, down 46 points at 1,085. Shares in Reverse Corp down 4.55 per cent to $0.525. Shares in Telstra and Telecom of New Zealand are also lower.
Looking to New Zealand and the NZSX50 is 19 points lower. Taking a look at the top five stocks by value on the NZSX50: Topping the list is Fletcher Building with stock up 0.51 per cent at $7.95, followed by; Telecom of New Zealand, Contact Energy, ANZ, and Auckland Airport.
To gold and the dollar: Gold is trading at $1001.20 US an ounce and the Aussie dollar is trading at 86.12 US cents.
