Midday: ASX rises on compromise hopes

Market Reports

As the US succumbed to a partial government shutdown, investor hopes for a compromise sent Wall Street higher and the Australian share market heeded the lead to open stronger. Local stocks have settled to be flat at noon, with health stocks propping the market up so far. The Aussie dollar has fallen sharply on the back of the release of trade data, with Australia’s trade balance remaining firmly in the red.
 
The S&P/ASX 200 index is 9 points up at 5,216. On the futures market the SPI is 2 points higher. 
 
Economic news
 
The Australian Bureau of Statistics says building approvals fell above expectations in August, with the number of buildings approved falling by 4.7 per cent to 13,687, down from 14,304 in July. Economists had anticipated a 0.5 per cent decrease. Despite the fall, building approvals are now 7.7 per cent higher than the corresponding period last year. 
 
Also from the ABS, Australia’s trade deficit widened to $815 million in August, against expectations of it narrowing to $400 million. Exports rose 3 per cent in the month, while imports went up by 1 per cent.
 
Company news 
 
Paladin Energy Limited (ASX:PDN) shares have jumped as the uranium explorer forecast significant cost reductions over the next two financial years, with cash cost cuts expected to total $US23 million. The cost reductions include a 24 per cent reduction in corporate overhead and exploration costs, reduced discretionary capex and a 10 per cent reduction to board and management salaries. Shares in Paladin are trading up 9.9 per cent at $0.53. 
 
Vmoto Limited (ASX:VMT) has announced the execution of a JV agreement with a private Chinese company, focusing on research, development and production of technology parts for the electric vehicle market. The electric scooter and ATV company has also secured commitments for a placement to raise $5 million, aimed at furthering its growth in China. Shares in Vmoto are trading down 7.41 per cent at $0.03. 
  
Best and worst performers

The best performing sector is Healthcare gaining 76 points to 13,734. Shares in Primary Health Care Limited (ASX:PRY) have risen 1.45 per cent and trading at $4.89. Shares in ResMed Inc.(ASX:RMD) and Sirtex Medical Limited (ASX:SRX) are also stronger. 
 
The worst performing sector is Materials, falling 65 points to 9,579. Shares in Perseus Mining Limited (ASX:PRU) have fallen 5.5 per cent, trading at $0.52. Shares in Resolute Mining Limited (ASX:RSG) and Beadell Resources Limited (ASX:BDR) are also lower. 
 
Gold and the dollar

Gold sank overnight as investors sold off in the face of a non-rally following the US government shutdown, it’s trading at $US1,285 an ounce and the Australian dollar, which fell nearly half a cent on the trade data, is currently buying $US0.9382.