Australian market higher at midday

$136 billion wiped off the S&P in three minutes due to a fake twitter post. Commsec report

THE Australian market is trading higher with shareholders buoyed by low inflation figures raising the prospect of an interest rate cut.

High yielding stocks that pay dividends were in demand but most sectors were higher at noon (AEST).

Australia's consumer price index (CPI), the key measure of inflation, rose 0.4 per cent in the first three months of 2013, below expectations for an increase of 0.7 per cent.

That appeared to have provided a shot in the arm for the market, with the Reserve Bank of Australia (RBA) having scope to cut the cash rate, in turn, increasing the appeal of equities, CMC Markets chief market analyst Ric Spooner said.

The high-yielding banks were benefiting, posting gains of about two per cent. Westpac jumped 66 cents to $32.37, Commonwealth Bank surged $1.27 cents to $71.28, National Australia Bank gained 65 cents to $32.72 and ANZ added 59.5 cents to $29.845.

The mining giants were also higher. BHP Billiton gained 34 cents to $31.70 and Rio Tinto surged $1.02 to $54.86. Pallet provider Brambles was higher after it forecast that a strong final three months of the fiscal year would help it deliver an underlying profit above $US1 billion ($978.52 million). Its shares were 14 cents, or 1.6 per cent, higher at $8.79.

KEY FACTS

* At 12.25pm AEST, the benchmark S&P/ASX200 index was up 63 points, or 1.26 per cent, at 5079.2 points.

* The broader All Ordinaries index was up 60.7 points, or 1.21 per cent, at 5063.3 points.

The June share price index futures contract was up 75 points at 5077 points, with 16,561 contracts traded.

* National turnover was 811.5 million securities worth $3.69 billion.

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Australian stocks higher at midday

AUSTRALIAN shares were more than one per cent up at noon, driven by Woodside Petroleum's $520 million windfall return to shareholders.

The oil and gas company has announced a special dividend and increased its dividend payout ratio just days after it cancelled its massive LNG project at James Price Point in WA. That has raised the prospect of other resources companies such as BHP Billiton and Rio Tinto doing the same as they have been cutting major projects, too.

"This new capital management initiative opens up Woodside to a whole new breed of followers or investors," IG Markets chief market strategist Chris Weston said. "They are trading on a 7 per cent yield, which is higher than what you get with Telstra or than you can get at the banks ... it is a really interesting thematic."

One stumbling block for the Australian market was a worse than expected HSBC flash purchasing managers index out of China, which shows how small business manufacturing is going there this month.

Woodside Petroleum had surged $2.79, or 8.06 per cent, to $37.39 by 1220 AEST. BHP Billiton was down 38 cents to $31.54, Rio Tinto dropped 71 cents to $54.41 and Fortescue Metals lost 8.5 cents to $3.735.

Commonwealth Bank had risen 60 cents to $69.93, Westpac jumped 47.5 cents to $31.795, ANZ gained 45 cents to $29.02 and National Australia Bank added 33.5 cents to $31.975.

Virgin Australia jumped 1.75 cents to 45.25 cents after the Australian Competition and Consumer Commission approved its acquisition of a 60 per cent stake in Tiger Airways.

KEY FACTS

* At 12.25pm AEST, the benchmark S&P/ASX200 index was up 44.9 points, or 0.9 per cent, at 5011.5 points.

* The broader All Ordinaries index was up 43.6 points, or 0.88 per cent, at 4999 points.

* The June share price index futures contract was up 48 points at 5007 points, with 17,723 contracts traded.

* National turnover was 806.5 million securities worth $1.94 billion.

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