Midday: Banks boost ASX on ECB rate cuts

Market Reports

The Australian share market has firmed 0.4 per cent at open on the back of more record highs on Wall Street and expansionary monetary policy announcements from Europe. Local bank stocks have gained after the European Central Bank (ECB) lowered interest rates to record lows and introduced a negative deposit rate for the first time. The ECB announced the measures as part of a package to encourage economic growth and combat the threat of deflation and has not ruled out quantitative easing. Elsewhere the big retailers Woolworths Limited (ASX:WOW) and Wesfarmers Limited (ASX:WES) are also stronger and a lift in the gold price has supported Newcrest Mining Limited (ASX:NCM) while the big miners BHP Billiton Limited (ASX:BHP) and Rio Tinto Limited (ASX:RIO) are down. 
 
Figures

The S&P/ASX 200 index has lifted 22 points to 5,459. On the futures market the SPI is 18 points higher. 
 
Economic news
 
The Australian construction sector improved last month but still stayed in contraction territory for the fifth straight month. Though home building remains strong it was offset by weakness in engineering and commercial construction. The Australian Industry Group (AiG) and Housing Industry Association’s (HIA) Performance of Construction Index (PCI) rose 0.8 points to 46.7 in the month, from 45.9 in April but remained below 50 which indicates contraction from expansion above the 50 level. 
 
Market movers 
 
Shares in Paladin Energy Limited (ASX:PDN) have eased despite clearing a hurdle to selling a 25 per cent joint-venture equity stake in its Langer Heinrich Mine. The uranium miner inked a $US190 million deal in January to sell the interest in the asset to a Chinese nuclear utility. Though the sale still remains conditional upon approval by Chinese Government authorities one condition has now been satisfied by the central planning agency in the People's Republic of China [National Development Reform Commission]. Shares in Paladin Energy have eased 1.43 per cent and are trading at $0.35 at noon. 

Shares in Amcom Telecommunications Limited (ASX:AMM) have also fallen after exiting a trading halt and announcing it has raised $40 million. The telco placed about 19.5 million shares at $2.05 per share to institutional and sophisticated investors. Amcom plans to put the funds to fund acquisitions as they arise to drive additional growth. Shares in Amcom Telecommunications have fallen 5.63 per cent and are trading at $2.10 at noon.   

Best and worst performers
 
The best performing sector is energy, gaining 110 points to 14,447. Shares in AWE Limited (ASX:AWE) have risen 2.46 per cent and trading at $1.88. Shares in Worleyparsons Limited (ASX:WOR) and Senex Energy Limited (ASX:SXY) are also stronger. 
 
The worst performing sector is utilities, dropping 23 points to 5,921. Shares in AGL Energy Limited (ASX:AGK) have fallen 0.91 per cent, trading at $15.25. Shares in Spark Infrastructure Group (ASX:SKI) and SP AusNet (ASX:SPN) are also lower. 
 
Gold and the dollar
 
Gold is trading at $US1,255 an ounce. 
The Australian dollar is buying $US0.9333.

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