Tuesday 21st September – Australian Market Wrap

The ASX 200 dropped and bounced closing up 26 points at 7274 (0.4%) as worries about contagion waned. Dow futures helping the cause up around 220 points. RBA minutes showed lower for longer. Despite commodity falls buyers streamed back in with iron ore miners even doing well, BHP up 0.6% and FMG up 0.3%. Second liners also prospered GRR up 3.3% and MGX rising 6.2%. Gold miners were in the green zone today with bullion higher, NCM up 0.8% and NST up 1.0%. BGL had a very good day rising 6.4%. Oil and gas were also better led by STO up 1.1% and WPL rallying 1.7%. Healthcare firmed, CSL and RMD leading. Industrials were mixed with WES firmer by 0.9% and REA up 2.4%. Tech better as the AllTech Index up 0.8%. APT rose 0.9% and WTC continuing to bound ahead by another 5.1%. Banks were sloppy with the Big Bank Basket down to $179.78. In corporate news, APA upped the ante for AST with a 260c cash and scrip bid, AST rose 9.8%. MLT is all over as the scheme is now legal and KMD eased back 1.4% after a slight warning on 1HFY22 earnings. On the economic front, RBA minutes showed lower for longer for record low rates and ANZ-Roy Morgan Consumer Confidence blip higher.

MAJOR MOVERS:

  • Winners: AST, BGL, ABB, WTC, NHC, BBN, CIA, NUF.
  • Losers: ADO, EHE, ERA, DUB, PMH, VUL, APA, NIC.
  • Positive sectors: Iron ore stocks. Oil and Gas. Tech/Telcos. Healthcare.
  • Negative sectors: Banks.
  • Hi 7270 Lo 7192. Decent range today.
  • Big Bank Basket: Drifts to $179.78.
  • All-Tech index: up 0.77%. APT up 0.9%
  • Gold: Firms slightly to AUD2426.
  • Bitcoin: Falls to US$42509.
  • Aussie Dollar: Stronger at 72.73c
  • 10-YEAR YIELD: Slips to 1.27%
  • Asian Markets: Tokyo down 1.7% catching up with events. Hong Kong down 0.21% on Evergrande worries. China unphased up 0.19%.
  • US Futures: Dow futures up 225. NASDAQ futures up 73.

STOCKS ON THE MOVE

  • BGL +6.41% bullion bounce.
  • AST +9.75% second bidder joins the game.
  • ABB +5.25% quality rising.
  • CIA +4.24% oversold bounce.
  • NUF +4.23% continuing higher.
  • INR +4.10% drawing buyers back.
  • MLT +0.30%% scheme legally effective.
  • VGL +3.90% solid move, thin volume.
  • DGL +2.69% acquires specialty chemical maker Aquapac.
  • IAG +0.40% risk officer resigns.
  • PNV +1.57% first patient enrolled in US burn study.
  • APA -4.73% bids for AST. Capital raising a possibility.
  • NIC -4.52% pig iron tax changes in Indonesia.
  • DUB -5.74% profit-taking
  • BTH -3.73% profit-taking.
  • WBC -0.43% ESG update.
  • BSL -1.42% annual report to shareholders.
  • AGE +9.41% EL8 +7.83% VMY +4.76% solid bounce in uranium stocks.
  • Speculative Stock of the Day: Comet Resources (CRL) +16.00% respectable volume on announcement of exceptional performance of graphite battery anode testing. Springdale Graphite has achieved exceptional results in a specialist factory in Gerrmany.

IN THE NEWS

  • Sigma Healthcare (SIG) -2.38% The market unimpressed with the outlook, down more than 7% early. Underlying EBITDA $39.2m vs year-ago $34.1m. Final fully franked dividend of 1c. FY22 is now expected to be closer to 5% underlying EBITDA growth, reflecting the increased impact and uncertainty from COVID-19 restrictions in 2H22 vs previous guidance of 10%.
  • New Hope Corp. (NHC) +4.37% was able to swing to a profit after a loss last financial year. Results look ok, not amazing. The main driver is the strength in the coal price. Full-year profit $79.4m vs year-ago -$156.8m.Underlying EBITDA $367.2m vs consensus $371.3m. Final dividend of 7c. The coal price has surged to record highs on the back of a global shortage of the steel-making ingredient. Management expects favourable prices over the next 12 months.
  • Insurance Australia Group (IAG) +0.40% Chief Risk Officer David Watts to step down.
  • APA Group (APA) -4.73% ups the bid for AusNet Services (AST) to 260c in cash and scrip. APA confirms on September 1 it approached AST with an indicative proposal to acquire all shares at 232c

ECONOMIC NEWS/ BOND MARKETS

  • Weekly consumer confidence was little changed rising only 0.2% last week. Confidence dropped in Victoria and NSW as daily COVID cases remained elevated.
  • A two-week shutdown for Victoria’s construction industry is estimated to cost the VIC economy ~$1bn per week.

CV19 NEWS

  • US will open air travel to vaccinated foreigners.
  • Pfizer Inc. and partner BioNTech SE said their vaccine was safe and produced strong antibody responses in children ages 5 to 11 in a large-scale trial.

New Bloomberg graphic on what is open where.

ASIAN MARKETS

  • S&P says Evergrande default likely. Direct government support is apparently unlikely. S&P says banking sector can absorb Evergrande collapse.
  • There are 846 registered car manufacturers in China, and more than 300 of them make new-energy cars or EVs or Plug ins.

US AND EUROPEAN NEWS

  • European markets showing modest gains at the open. Universal Music Group (UMG) lists in Amsterdam. EUR18.50 reference price.
  • S&P 500 seeing highest volumes since March.
  • Justin Trudeau has won an historic third term but without majority. Trudeau’s Liberal Party was elected or leading in 156 of the 338 seats in the House of Commons, compared with 122 seats for the Conservatives under Erin O’Toole. Must be Plenty’s brother.
  • Record prices for gas in the UK.
  • US death toll from CV19 now bigger than the Spanish flu.
  • US Government to hold crisis talks with US energy providers. UK says no question of ‘lights out’ this winter. US Natural gas futures up nearly 96% this year.
  • Rusal is supply Budweiser with ultra-low carbon cans. World’s first near zero carbon aluminium.
  • The new AUKUS Brat pack meets in Washington. Foot long subs for working lunch perhaps. Croissants are off.
  • ‘Jab or job’ is the choice in France for health workers. ‘Le Jab ou Le Job’. Vous Choisissez.
  • Klarna CEO says an IPO is likely to happen sooner rather than later. Volatility though is spooking CEO.

And finally…….

Anyone who says onions are the only vegetable to make your eyes water has obviously never been hit in the face with a turnip.

I’ve just got a job for halloween making plastic Draculas; there’s only two of us on the production line so I’ve got to make every second count.

Clarence

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