Aussie shares followed a positive lead from Wall Street to be 0.6% in the black by midday. Property Trusts set the high water mark, while materials and resources tracked base metals higher. 

In economic news, according to the ABS Australia’s trade deficit doubled in May to $556 million from the previous month as exports fell at a faster rate than imports. The deficit was ahead of a forecast $125 million drop for the month.

At lunch, the All Ords was up 26.4 to 3,898.7, while the ASX/200 had added 28.5 points to 3,902.5. Over 1 billion shares, or $1.5 billion had changed hands.

Materials and Resources gained 1.6% as talks between Chinese steelmakers and iron-ore suppliers across the world continued despite reports the China Iron & Steel Association has buckled and accepted price cuts below the 40% they were seeking, but still above the 33% initially negotiated by suppliers.

Rio Tinto gained 1.5% after selling 97% of its shares in London on offer under the rights issue. Rival BHP Billiton added 1.8%.

Fortescue put on 0.8%, while steelmakers Onesteel and Bluescope advanced 1.2% each. Sims Metal was 2.8% stronger.

Gold miners Newcrest and Lihir climbed 2.9% and 3.1% as gold futures rose 1.5% on the NYMEX.  

The Energy sector dipped 0.1% as the price of crude fell overnight. Woodside and Santos gained 0.3% and 0.7%, while Origin and Oil Search lost 1.5% and 0.9%.

Arrow Energy set the low water mark for the sector, dropping 3.2%.

Caltex Australia slid 0.8%, while oil field engineering firm Worley Parson added 0.7%.

Banks and Financials gained 0.7% as the big four were no more than 0.6% either side of the line. ANZ and NAB put on 0.6 % each, while CBA and Westpac both slid 0.3%. The latter put an end to its shareholders benefits package after six months of deliberations.

IAG and QBE were the best performing insurers with 1.4% and 1.3% gains.

Macquarie Group rose 1.1%, while bourse operator ASX lost 1%.

Strong gains by sector heavyweights led Property Trusts 2.0% higher. Stockland, GPT and Lend Lease jumped 3.6%, 3.2% and 2.6% respectively.

Westfield and CFS Retail put on 1.9% and 1.2%. Despite chairman David Clarke resigning from its board Goodman Group were 3.9% dearer at lunch.

A 1.6% gain from Wesfarmers led the Consumer Staples sector 0.4% into the black. Woolworths dipped 0.1%, while Goodman Fielder climbed 3.8%.

Coca-Cola Amatil fell 1% as brewers Lion Nathan and Fosters added 0.1% and 0.8%.

It was a mixed morning for Consumer Discretionary stocks, resulting in the sector only edging 0.2% above the line. Retailers Harvey Norman and JB Hi-Fi shed 1.2% and 0.9%, while Billabong and Pacific Brands advanced 1.2% and 2.4%.

Gamers Tatts and Sky City lost 1.6% and 1.4%. Aristocrat put on 1.6%.

Of the media stocks, Ten and Newscorp added 1.8% and 1.2%.

A 1.8% rise from Leightons failed to keep the Industrials sector above the line as it dipped 0.1%.  Brambles lost 0.9%, while Toll put on 1%.

Macquarie Infrastructure and Auckland International Airport sank 3.6% and 3.1%.

Telstra led Telecommunications 0.7% higher with a 0.9% gain.

Around the region, the Nikkei 225 lost 5.2 to 9,934.8, the Straits Times Index gained 6.5 to 2,359.1 and NZSE50 added 21.4 to 2,801.7.

Spot gold was trading at US$939.60 per ounce and the Aussie was buying US$0.8066.

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Westpac abolishes benefits package
Westpac Banking Corporation has decided to end the shareholders benefits package due to low take up and increasing costs. The bank said only 10% of shareholders had taken advantage of the package.

At lunch, Westpac shares were down 4c to $19.64.

NHF reaffirms guidance
NIB Holdings Limited said its policyholder growth rate for the year ending 30 June was 5.17%, or an extra 18,899 new policies. In April, the company said it was predicting a growth just above 4%.

Halfway through the day, NHF shares were up 1.5c to 90c.

Rio Tinto closes rights issue
Rio Tinto said it received valid acceptances representing almost 97% of the total number of shares the mining giant offered in the rights issue announced last month. The company announced that the Rio Tinto plc rights issue closed for acceptances at 11.00 a.m. London time on Wednesday, 1 July.

At midday, Rio Tinto shares were up 79c at $52.40.

Constellation brands reports 15% drop in Q1 sales
Constellation Brands reported a post-tax income of $7 million for first quarter of the 2010 financial year, in line with the previous corresponding period. The US-based wine conglomerate also re-affirmed its guidance, saying it expected reported earnings per share to be in the range of 97c to $1.07 per share for FY10, against a loss of $1.40 per share in FY09.

At noon, CBR was untraded at $1.50.