Following a negative lead from Wall St overnight, the local share market is trading flat at midday with on ongoing concern for the Federal Governments Resources Super Profits Tax causing investors to be wary. The mining industry is holding its annual conference in Canberra today hoping to reach a compromise with the Federal Government over its mining profits tax.
The S&P/ASX200 index is 5 points higher at 4,418 and on the futures market, the SPI200’s up 11.
In economic news: According to the ABS, gross domestic product rose 0.5% in the March quarter following a 1.1% rise in the December quarter last year. For the year to date, GDP is up 2.7%, economists expected 2.4% growth.
In company news: The strengthening price for thermal coal has prompted Deutsche Bank to upgrade its earnings expectations for several mining stocks including giants BHP Billiton Ltd (ASX:BHP) and Rio Tinto Ltd (ASX:RIO). The Australian reports that the German bank expects thermal coal prices to rise by 26% over the next couple of years as a result of an increase in net imports to China and India. Analysts at the bank raised their profit guidance by up to 5.5% in 2012/2013 for the two Aussie miners and reiterated a ‘buy’ rating on the stock. BHP shares rose 0.37% to $38.39 and Rio Tinto shares gained 1.17% to $67.66.
In more ratings news, UBS has upgraded Flight Centre Ltd (ASX:FLT) to ‘buy’ from ‘neutral’ following the company’s earnings upgrade and strength in the domestic travel market. Flight Centre says it now expects to report profit before tax of between $190 and $200 million. UBS says it believes that outbound travel demand will continue to remain robust due to the strength of the Aussie dollar and low airfares. UBS also says Flight Centre should return to peak earnings in 2011and that the return to growth should encourage strong cash flows. Shares in Flight Centre added 2.16% to $17.47.
Turning now to market indices: The best performing sector at noon is the Telco Services index, up 24 points to 1,028. Shares in Hutchison Telecommunications are 4.4% higher at $0.095. Shares in Telstra and Singtel are also higher.
The worst performing sector is the Consumer Discretionary index, down 13 points to 1,514. Shares in Webjet lost 3.16% to $1.84, while shares in McPherson’s and REA Group are also lower.
Looking to New Zealand and the NZSX50 is 18 points lower. Taking a look at the top 4 stocks by turnover: At the top is Telecom of New Zealand with stock down 0.53% at $1.86 followed by; Fletcher Building, Sky Network Television, and Sky City Entertainment Group.
To gold and the dollar: Gold is trading at US$1,221.80 an ounce and the Aussie dollar is trading at 83.71 US cents.
