Following a choppy session on Wall St overnight after economic reports showed rising inflation and a mixed outlook for manufacturing, Aussie stocks are higher at midday, rebounding from earlier losses as energy and financial stocks gained.
The S&P/ASX200 index is 12 points higher at 4,686 and on the futures market the SPI 200’s up 21 points.
In economic news: According to the ABS, gross domestic product in the third quarter rose 0.2% from the previous quarter, up 0.5% compared to the same time last year.
In company news: Westpac Banking Corporation (ASX:WBC) has again tried to defend its decision to raise interest rates by 45 basis points, by saying that it would do no favours to anyone by offering mortgages at rates that it knows to be unsustainable. At the company’s AGM Chairman Ted Evans told investors that the bank has absorbed some of the external cost increases, rather than pass them on to borrowers at the expense, of course, of shareholders. Mr Evans says with interest rates now clearly on the rise again, both at home and abroad, there are limits to how long the bank could continue to absorb these costs without weakening the bank, the Australian financial system and, hence, the Australian economy. Westpac shares gained 0.38 per cent to $23.89.
Toy wholesaler Funtastic Ltd (ASX:FUN) says it expects to post a loss in earnings before interest, tax and amortisation of between $57 million to $60 million for the 12 months to December 31, 2009. The result due to a number of factors including the continued decline in trading conditions, volatility of the Aussie dollar, and revenue loss from the collapsed ABC Learning Centres. Revenue is expected to be 15% lower than last year, driven down by its Toy and Judius businesses, however the company says its Madman and Sporting businesses have both seen strong sales during the year. Funtastic shares fell 11.11 per cent to $0.20.
Turning now to market indices: The best performing sector at midday is the Telco Services index, up 13 points at 1,190. Shares in Telecom of New Zealand advanced 1.86% to $1.915. Shares in Telstra and Macquarie Telecom Group are also higher.
The worst performing sector at midday is the Consumer Staples index, down half a point to 7,538. Shares in Woolworths fell 0.51% to $27.06. Shares in Coca-Cola Amatil are lower while shares in Metcash are slightly higher at noon.
Looking to New Zealand and the NZSX50 is 12 points higher. Taking a look now at the top 5 stocks by turnover: At the top of the list is Telecom New Zealand stock up 0.84% at $2.40, followed by Fletcher Building, Auckland Airport, AMP, and Kiwi Income Property Trust.
To gold and the dollar: Gold is trading at US$1,122.50 an ounce and the Aussie dollar is trading at 90.42 US cents.
