The Australian stock market was trading flat at midday after opening firmer this morning, starting 2011 on a positive note. At midday, however, the share market lost earlier wins with the banks offsetting gains by the major miners such as Rio Tinto and BHP Billiton. Insurers and retail banks were all lower at midday.
The S&P/ASX200 index is down 13 points and is 4,733 at noon.
Economic news: A survey from the Australian Industry Group and PwC Australian Performance of Manufacturing Index (PMI) shows that manufacturing activity softened in December due to weak domestic demand and a stronger Australian dollar. The Performance of Manufacturing Index fell by 1.3 points to 46.3 points in the month as a result of falls in the clothing and footwear, textiles and wood products sub-sectors. A reading below 50 indicates contraction in activity.
Company news: BHP Billiton Ltd (ASX:BHP) is on track to beat its own profit record for corporate Australia in 2011 and anticipates a result for year to June of more than $US20 billion. The forecasted result would represent a 68 per cent improvement on the $US12.7 billion posted for 2010 and would exceed BHP’s previous best of over $US15 billion in 2008. The forecast, which is based on the expectations of seven leading analysts, means that BHP’s earnings capacity comfortably matches the combined profitability of the big four banks. The first taste of BHP’s record 2011 profit will come on February 16 when the company releases its interim profit report. Shares in BHP Billiton are 0.22 per cent higher at $45.35. Rio Tinto Ltd’s (ASX:RIO) subsidiary Alcan Cable, an aluminium cable manufacturer, plans to set up a new legal entity for its operations in Mexico. Alcan says the move will make expanding and doing business in the local currency easier. Alcan has been struggling with a prolonged slump in demand and announced in August last year that it would shut operations in Roseburg, Oregon, cutting 77 jobs. Shares in Rio Tinto are 0.27 per cent higher at $85.70.
Turning to market indices, and the best performing sector is Materials with the index advancing 74 points to 14,154. Shares in Lynas Corporation have risen 12.62 per cent to $2.32. Shares in and Alumina Limited and BHP Billiton have also gained at noon. The worst sector at midday is Real Estate Investment Trust, down 9 points to 832. Shares in Australand Property Group have fallen 2.06 per cent and are $2.85. Shares in Stockland and Westfield were also down at midday.
To New Zealand: The NZSX50 has dropped 25 points. Taking a look at the top 4 stocks by turnover, SmartTENZ is at the top of the list with stock steady at $0.88; followed by SmartMOZY, BRM Warrants and SmartFONZ.
To gold and the dollar: Gold is trading at $US1,415 an ounce and the Aussie dollar is buying $US1.159.
