Market Review

A valiant effort from the market early after weak offshore leads was based on defensives and banks rallying, whilst resource stocks fell in a heap. The market hit a high of 4688 before succumbing to weakness in Asia and especially China which fell another 5% today as the Credit Crunch took a bite out of investor confidence. Financials and other defensives were better but the big resource stocks were murdered. #BHP# and #RIO# taking the brunt of it whilst #WPL# also came in for heavy selling pressure. And of course #NCM# and the Golds were massacred yet again, there is not much left of the sector to be frank! BHP alone contributed 7 points of the downside to the index however the rises in the banking sector with #CBA#, leading with 3 index points and #WBC# with 3 points, was not enough to offset the negativity. In the end the market fell 13 pts down to 4656

Telcos and consumer stocks were slightly better with #TLS#,#WES# and #WOW# finding their feet along with #CSL#. Energy stocks were down hard with #WPL# leading the way with #OSH#,#CTX#,#ORG# and #STO#. Wealth managers were hit hard following #AMP# ‘Mea Culpa’ yesterday, #MQG#, #PPT#, #HGG#, #BTT# and #MFG#. Media stocks also fell with #APN#,#NWS#,#FXJ# and #SWM# feeling the pain and healthcare stocks were slightly in demand with #SIP#,#SHL# and #ANN# continuing to bounce. Mining services were easier with #BLY#,#MAH# and #NWH# down whilst #BKN# gathered some friends today

Grinners today included #GWA#,#GFF#,#SIP# and #CGF# whilst biggest losers were #CDU#,#PPT#(big time),#IGO#,#XRO#,#SWM# and #WTF#

In the much touted IPO #ISU#, the stock seemed to find a level today and at one stage looked ok as the sellers dried up and it perked up to 159!

Volume was slightly better but the market remains skittish and focussed on China. Not likely to change this week I suspect. End of tax year loss selling is putting big pressure on the small resource sector

Stocks in the News

#BBG# today announced that they were still in ongoing talks with a customer to sell another pair of boardshorts. Just joking, they remain locked in talks with private equity on refinancing and funding issues. They get a free brand name if they fund the company!

#GFF# surged today with news that they have renegotiated the dollar bread deals with Coles . The new contract overshadowed a profit downgrade, with the group now expecting a pre-tax profit of between $195-200 million, down slightly from median analyst forecasts for a pre-tax profit of around $202.5 million for the year to June.

Embattled gold miner #NCM# has brought in the big guns to tackle an independent review of their disclosure policy. Not sure if it can be truly independent if they are paying but let’s not get too picky. Good to see Dr Maurice Newman on board. Former head of Deutsche and ASIC does bring some gravitas to the proceedings but suspect he would rather be in London for the Ashes knowing that he is a cricket tragic.

#NBL# fell today as the ailing retail sector in Australia claimed another victim after the  women’s fashion chain warned it would slide to a full year loss of between $3.5 million and $4 million after a review of its goodwill triggered a substantial non-cash write-down.

In house stocks #LNC# continue to plunge to the depths despite going into the ASX 200 index. Looks like it will not be there for long at this rate though

Tomorrows News Today

Me and my shadow. It’s all about China at the moment. The credit crunch there is really mushrooming around the World. Not a good time for Benny and the Inkjets to be talking about stimulus removal. According to Moody’s Asian Liquidity Stress Index published earlier this month, the China sub-index showed that about one third of below-investment grade Chinese companies had inadequate internal sources of cash to fund their debt over the next 12 months. Unfortunately the growth of shadow banking is starting to unravel and is causing some serious issues for the government which it seems unwilling to address. They seem to be going for the pain now and clear skies later approach. Not working at the moment though!

Shanghai  has had Its biggest 2-day drop in almost 4 years (-8.9%) and Japan’s Nikkei 225, after staging a solid come-back has collapsed 450 points from its highs of the early session smashing below the US day-session lows.

The Afghan Presidential Palace has been attacked in Kabul and shows how precarious the situation is there. All that money, all those lives lost and for what?

The nationwide protests in Brazil have forced the new President Dilmar Rousseff to the negotiating table with the promise of major reforms especially to transport.

And there is one winner of the Zombieland turmoil. Organised crime emanating in Eastern Europe has soared. Rob Wainwright, director of the EU’s crime-fighting agency, said Europe’s black market in counterfeit foodstuffs, pharmaceuticals and machine parts doubled to a value of about €2bn in the early years of the recession. It will only get worse as tax evasion continues and cyber criminals are now targeting financial service companies. Its hardly fair these guys have been ripping off their customers for years and now the Russian Mafia is trying to do so as well. Competition is fierce!

And in news just in there looks like there is a press conference in Shanghai. The equity market there has rallied to be only down 2.5% in anticipation of action by the PBOC..we shall see,

Advertisements