Afternoon Update 10/26/2012

Japan has approved a Y423 billion (A$5.15 billion) economic stimulus package. The government hopes this will fend off recession as signs continue to emerge that the world’s 3rd largest economy is faltering.

The Aussie/USD is still below the 1.0400 level. Traders have been selling against that level and buying the dip around 1.0200. The Aussie hit 83.48 against the yen earlier, a 2 month high. The past 2 days have been good for the Aussie after yesterday’s consumer price index reading and Chinese purchasing managers index.

The ASX 200 was down 22.1 at 4488.40. Prices today broke the 4500 level which had been acting as support.

Macquarie Group reported net profit for the last 6 months rose 18 percent to A$361 million. The stock was last up 4.03 percent or A$1.01 to A$31.01. The investment bank is the best performer on the ASX 100.

Australia’s big 4 retail banks were mixed. ANZ was down 6 cents to A$25.32 and CBA was off 22 cents at A$57.08. NAB had risen 2 cents to A$26.02 and Westpac was up 7 cents to A$25.33.

Whitehaven Coal’s shares have come off trading halt and fallen almost 4 percent. The stock was last at A$3.09, down 11 cents. The stock dropped after the company said thermal coal prices had dropped to below the cost of production. Also, there was speculation the CEO Tony Haggarty wants to quit by confirming a succession plan has started but no date has been set for him to leave.

In commodities markets, crude was last at $85.76, down 29 cents. Gold was last at $1711.50, down $1.50 and silver was $32.02, down $.02. Markets are awaiting US GDP data due later.

US equity futures weakened and S&P futures were last below the critical 1400 level at 1399.25. Futures weakened after Apple’s earnings miss and China Unicom missed in Hong Kong.