Midday: Stocks flat at midday, lead by financials

Market Reports

The Australian share market was trading flat at midday after receiving mixed leads from offshore trading. Wall Street and European equities ended the week higher but oil and precious metals fell. Today’s leads look likely to come from the financial sectors, with all the Big Four trading in the black. Resource stocks were mixed, with BHP slipping whilst rival Rio Tinto edged higher after takeover target Riversdale unanimously backed its bid.

The S&P/ASX200 index gained 6 points and is 4,762 at noon. On the futures market the SPI is up 4 points.

Company news: Woolworths Ltd (ASX:WOW) has downgraded earnings guidance for the 2011 financial year, despite posting a rise in sales growth for the first half of the year. The giant grocer reported a 3.8 per cent increase in first half sales to $28.3 billion, up from $27.2 billion dollars in the previous corresponding period. But the company cut its full-year 2011 net profit growth guidance to an increase of between five and six per cent, from a previous range of between eight to 11 per cent. The firm says lower consumer confidence levels, inflation, interest rates and natural disasters in both Australia and New Zealand lead to the earnings downgrade. Shares in Woolworths are 2.44 per cent lower at $26.80.

Rare earths specialist Arafura Resources Ltd (ASX:ARU) says it has agreed to sell a gold exploration project to junior resources company Global Mineral Resources. The firm says it is selling its Mt Porter-Frances Creek gold project for which it will receive 1.5 million in cash, 7.5 million fully paid shares in Global and 7.5 million options in the company, exercisable at 25 cents each. Global plans to list on the Australian Securities Exchange mid-year, at which time the transaction will be settled. Shares in Arafura Resources are 0.36 per cent higher at $1.405.

Market indices: The best performing sector is Financials excluding Real Estate Investment Trust with the index rising 28 points to 5,143. Shares Bendigo and Adelaide Bank in have risen 1.02 per cent to $9.90. Shares in Commonwealth Bank and Westpac have also lifted at noon.

The worst performing sector at midday is Energy, losing 67 points to 16,098. Shares in Empire Oil & Gas have eased 8.33 per cent and are just over $0.01. Shares in Karoon Gas and Golden Gate Petroleum have also dropped at midday.

To New Zealand: The NZSX50 is up 5 points. Taking a look at the top 4 stocks by turnover, Telecom Corporation of New Zealand is at the top of the list with stock 0.43 per cent lower at $2.30; followed by Fletcher Building Group, Restaurant Brands of NZ and AMP NZ Office Ltd.

Gold and the dollar: Gold is trading at $US1,347 an ounce and the Aussie dollar is buying 98.79 US cents.

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