Midday: Profit reports support ASX gains

Market Reports

Following five straight weekly losses the Australian share market advanced 3.7 per cent over last week and has continued to move higher this morning as reporting season rolls on. Today’s rise come after Wall Street’s major indexes recorded their second straight week of gains as US investors shrugged off disappointing economic data on Friday. 
While the benchmark has come off the morning’s high it is still trading near the year’s high along with the local currency ahead of tomorrow’s February board meeting minutes from the Reserve Bank of Australia (RBA).
Across the sectors most are on positive territory led by materials charging ahead on higher commodity prices. Telco’s have moved lower and financials are dragging as Commonwealth Bank of Australia (ASX:CBA) trades ex-dividend today.  
The S&P/ASX 200 index has gained 15.6 points and is sitting at 5,372. On the futures market the SPI is 29 points higher. 
Economic news
Ratings agency Standard & Poor’s has named Australian banks as among the world’s five most stable. A new report from the agency claims, “Australia is currently one of the five least-risky banking systems of the 86 for which Standard & Poor's has published banking industry country risk assessments." S&P also says its most likely scenario for this year is, “A year of continuing investment-grade ratings resilience."
Company news
Bendigo and Adelaide Bank Limited (ASX:BEN) has reported a fall in first half profit but maintained a stable outlook of the back of improved cash earnings. The regional lender’s interim net profit dipped 4.6 per cent to $180.7 million in the same period cash earnings lifted 9.5 per cent to $185.9 million. Managing Director Mike Hirst has forecast stability and for the focus of competition to shift from deposits to assets. A fully-franked interim dividend of 31 cents per share has been declared. Shares in Bendigo and Adelaide Bank have risen 1.19 per cent and are trading at $11.86. 
UGL Limited (ASX:UGL) has reported higher interim earnings and flagged plans to split its property group DTZ from its engineering arm through a demerger or sale of DTZ. The engineering contractor’s net profit gained 13.5 per cent to $29.5 million in the first half as revenue rose 5.6 per cent to $1.99 billion. CEO Richard Leupen says UGL is currently being repositioned for softer domestic market conditions with significant restructuring initiatives underway to protect margins. The Board have nominated to conserve the company’s cash position and an interim dividend will not be paid. Shares in UGL have dropped 5.79 per cent and are trading at $6.67. 
Best and worst performers
The best performing sector is materials gaining 94 points to 10,552. Shares in Resolute Mining Limited (ASX:RSG) have risen 8.78 per cent and trading at $0.71. Shares in Medusa Mining Limited (ASX:MML) and Evolution (ASX:EVN) are also stronger. 
The worst performing sector is telco services, easing 5 points to 1,805. Shares in Telecom Corp of New Zealand (ASX:TEL) have fallen 0.88 per cent, trading at $2.25. Shares in iiNet Limited (ASX:IIN) and M2 Group Limited (ASX:MTU) are also lower. 
Gold and the dollar
The price of gold jumped $18.40 overnight and has firmed $US1.00 this morning to $US1,320 an ounce.
The Australian dollar has stayed strong above $US0.90 after Chinese lending data was released over the weekend, but has pulled back slightly to $US0.9047.

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