Market Action

Another lacklustre start to the day, we gave way to some more profit taking as the Business confidence figures came in weaker than expected. The market slide gathered momentum as the day wore on with very few pockets of green on the screen .The Chinese market added to our woes as Asia turned red and the Shanghai Composite lurched  lower by nearly 1% having been up 1% early. National Australia Bank (A$31.54, -0.3%)  struggled to keep its head above water but the Commonwealth Bank of Australia (A$70.58, +0.6%) continued its world domination, however other financials did suffer with Australia and New Zealand Banking Group (A$29.05, -0.5%), Westpac Banking (A$31.16, -0.3%) and Macquarie Group (A$39.14, -0.9%) rounding out the banks with insurers mixed with QBE Insurance Group (A$13.75, +0.4%), Suncorp Group (A$11.75, -0.1%), AMP (A$5.35, +0.2%) and Insurance Australia Group (A$5.74, -0.9%) all swinging between gains and losses Resources were again the losers with BHP Billiton (A$35.67, -0.4%), RIO Tinto (A$61.92, -1.9%) and Woodside Petroleum (A$36.75, -1.7%) leading the sector down. As usual Newcrest Mining (A$21.68, -1.2%) disappointed with other gold companies following suit Kingsgate Consolidated (A$3.99, -1.7%), Evolution Mining (A$1.37, -3.2%) Silver Lake Resources (A$2.22, -3.9%) and St Barbara (A$1.255, -3.8%).

Industrials were also in the headlights with Boart Longyear (A$1.39, -5.1%) once again slipping along with Brambles (A$8.52, -1.2%), CSR (A$2.13, -1.4%) and Boral (A$5.12, -1.0%). Energy stocks were a little weaker with Woodside Petroleum (A$36.75, -1.7%), Santos (A$13.14, -3.0%), Origin Energy (A$12.65, -0.1%) and Caltex Australia (A$22.09, -2.6%) seeing some profit taking. Defensives were weaker with previous star stocks like Wesfarmers (A$42.50, -0.8%), Woolworths (A$35.34, -1.0%), Telstra (A$4.48, -1.1%) all a little weaker. Media stocks were weaker after Senator Conjob’s announced the review of the convergence report. Ten Network (A$0.37, -2.6%), Seven West Media (A$2.35, -1.3%), News (A$29.98, -0.6%) all came in for some profit taking.

In the winner’s circle today were Magellan Financial Group (A$7.05, +3.7%), Goodman Fielder (A$0.725, +2.1%), Southern Cross Media Group (A$1.72, +2.7%) and Fairfax Media (A$0.64, +2.4%), whilst big losers today were Silex Systems (A$3.05, -5.9%). Beadell Resources (A$0.88, -6.4%) Whitehaven Coal (A$2.39, -5.5%) (again) and Karoon Gas Australia (A$6.37, -4.9%).

Spare a thought for the shareholders of Kidman Resources Ltd (A$0.475, +143.59%) today after a very good announcement the stocks doubled. Champagne all round! After the meteoric rise of Sirius Resources (A$4.50, +2.27%) and the subsequent volatility the market is searching for the next one to find massive sulphides and this tiddler seems to be on the right track.

Volume was a little on the low side as enthusiasm is waning somewhat.

Stocks in the Spotlight

Usually it’s ‘stocks in the news’ but after the mammoth reporting season most of the news is out there, so another quiet day for meaningful announcements.

In Pharmaxis Ltd (A$0.545, -8.4%) today they announced that CEO Dr Alan Robertson was stepping down immediately and would be replaced by Pharmaxis’ chief operating officer Gary Phillips.

House stocks today enjoying some positive moves included Mastermyne Group (A$1.67, +1.2%) and APN News & Media (A$0.35, -2.8%) which has risen 36% since the board and management reshuffle.

Today also saw the start of trading in  IPO Strata-X (A$0.35, +16.67%) which came on with a strong showing on reasonable volume. This is an oil play on the west edge of the Eagle Ford shale area in the US. Certainly a good start for this oil junior.

In economic announcements today, Business conditions weakened slightly in February, with a lack of demand in the non-mining sectors and as the strong Australian dollar weighed down the manufacturing sector, according to National Bank Business conditions fell to minus 3, down from minus 2 in January, as firms recorded modest falls in profitability, although employment conditions improved, the survey reported. At the same time, business confidence edged down slightly to 1 point in February from 3 points in January, remaining below the long-term average, as confidence fell in the mining, wholesale, and recreation and personal services industries.

Tomorrow’s News Today

Senator Conroy has announced a raft of changes to the Media landscape today which looks to benefit the incumbent free to air stations provided they produce local content. Licence fees to be reduced with local programming the centre piece of this proposed legislation. However the so called ‘Reach’ policy allowing a TV station to be blocked from reaching over 75% of the National Audience has been ‘Sir Humphreyed’ and sent to a committee.. Apparently the minister was being ‘too courageous’! Lots of motherhood statements about diversity of the free press and what it means for democracy and even a stronger regulation and a public interest test to media mergers. Let’s face it, these guys are gone in September, so the whole ball game could change but one thing is certain is that election years must be good for media companies.

The Federal Government will also impose tougher environmental checks on coal seam gas (CSG) and large coal mines to appease Tony Windsor. Power at any price perhaps.

Expect to see more angst in the North South Korea relations as the US has its annual war games. In Japan though The Yen has dropped to a 3 ½ year low on expectations on more stimulus from the BOJ. And more news from Japan, it says it has extracted gas from offshore methane hydrate, a world first. Says deposits could supply its natural gas needs for 100yrs.And Nuclear is safe as houses!

Judge invalidates New York City’s ban on large sugary drinks; ban had been scheduled to take effect tomorrow. Judge says sugar drink limit “illegal” Judge finds ban to be arbitrary and capricious. Bloomberg won’t be happy!

And in more US news, a record 20% of the eligible population are on food stamps, that’s over 47m people..and the Dow is at a record!

And in China, they sure have got a pig of a problem with pollution. More than 2,800 dead pigs have been pulled from the Songjiang and Jinshan sections of the Huangpu river in Shanghai, the government said yesterday. If it was in India you could say Holy Cow but in China brings a whole new meaning to ‘Pork Barreling’.

Clarence

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