Phew! That was close. Dodged a bullet! Despite China slipping a little after the calming words from PBOC, the gains were across the board as relief that we have avoided a full blown credit crunch in China. For Now anyway. The market did drift a little after a massive jump out of the blocks but still put in a solid performance up 1.63%. Although let’s face it the stock market is just a side show today compared to the land of make believe, that is Canberra. It’s the race that stops a nation! Amazing that anyone would want to replace the Captain of the Titanic, after it has stuck the iceberg and is sinking fast. Still the market had a very positive day today with gains across the board as resources led the way. BHP Billiton (A$31.62, +2.6%), RIO Tinto (A$51.90, +3.3%), Woodside Petroleum (A$34.31, +1.7%) and even Newcrest Mining (A$9.31, +0.1%) were up after the last two days of rout. Banks and other financials also had a holiday in the sun led by Commonwealth Bank of Australia (A$67.29, +1.8%), Macquarie Group (A$41.74, +3.8%) and Westpac Banking (A$28.24, +1.9%). Other defensives like Telstra (A$4.65, +2.9%) enjoyed their day out as did Brambles (A$9.09, +2.0%) and Woolworths (A$32.09, +0.8%). The other bad news story today though is gold which continues to fall hitting 1250 and extending its biggest loss since 1920! Surprisingly the Gold Index has held up better than expected but maybe it was due to a report that Newcrest Mining (A$9.31, +0.1%) was ripe for a takeover .Maybe they are not the only ones?
In the sectors, Consumer stocks were firmer Crown (A$12.00, +4.3%), Harvey Norman (A$2.49, +0.4%), Flight Centre (A$39.65, +2.7%), Aristocrat Leisure (A$4.20, +4.0%), The Reject Shop (A$17.16, +4.6%), JB Hi-Fi (A$15.85, +3.5%) as were energy stocks like Woodside Petroleum (A$34.31, +1.7%), Santos (A$12.33, +1.1%), Linc Energy Ltd (A$0.91, +11.7%) and Oil Search (A$7.73, +1.3%). Wealth managers managed to create some today as Magellan Financial Group (A$9.95, +5.1%), Henderson Group PLC. (A$2.43, +2.1%), Platinum Asset Management (A$5.45, +1.7%) and AMP (A$4.35, +0.9%) rallied. Media stocks were in the news as APN News & Media (A$0.285, +11.8%), Fairfax Media (A$0.48, +3.2%) and Seven West Media (A$1.86, +1.1%) all firmed.
The grinners today were Ainsworth Game Technology (A$3.98, +9.0%), iiNet (A$5.90, +5.7%), GWA Group (A$2.40, +5.7%), Sandfire Resources NL (A$5.20, +4.4%) and Bradken (A$4.47, +4.9%). While sitting in the naughty corner were Paladin Energy Ltd (A$0.82, -6.8%), Hutchison Telecommunications (Australia) (A$0.046, -4.2%), Goodman Fielder (A$0.73, -2.0%). Whitehaven Coal (A$2.17, -1.4%) and Amalgamated (A$8.24, -0.4%).
Volume remained a little on the low side but better than some days. And no downgrades today, must be some kind of record.
Stocks in the News
Interesting move in the US based Antares Energy (A$0.48, +71.4%) which announced they had signed a letter of Intent to sell their Permian assets for $300m! If this goes ahead it has big implications for other US gas and oil producers listed here.
Moly Mines (A$0.12, +14.3%) have surged around 20 per cent after the minerals explorer agreed to sell iron ore to processing company Mineral Resources for about $38 million.
Paladin Energy Ltd (A$0.82, -6.8%) fell by more than 10 per cent after it delayed until August a deal to sell a stake in an African uranium mine. A deal with two nuclear parties for a minority equity position in the Langer Heinrich project in Namibia was expected to have been finalised by the end of June.
The cost of locking in China’s interest rates slid for a fourth day, the longest run of declines since February, and money-market rates fell after the central bank pledged to ease the worst cash crunch in a decade.
Looks like there will be a few jet skis on ebay as well as Hiluxes for sale, as Peabody Energy Corp and Glencore Xstrata will cut around 500 mining jobs in Australia, a company official and trade publication says, as a global glut in coal supply pushes down prices. Peabody plans to cut around 450 contractor jobs, while Glencore Xstrata will lay off around 46 employees at its Ravensworth coal mine.
Tomorrows News Today
Will we have a new PM tomorrow? That is the big question. Another step closer for the Stephen Bradbury of Politics, Tony Abbott. And if I was a gambling man I would back the Coalition to win Government on any blow out in odds after Rudd takes the crown. Unfortunately the Labour party don’t read Shakespeare.. For “If it were done when ’tis done, then ’twere well , It were done quickly.”
Should be interesting in the coming months to see what the new BOE chief Carney will do there. The Old Lady of Threadneedle Street has not had a foreign chief for 300 years!!Ok he’s Canadian so not that foreign but expect a shakeup in how the UK Central bank does things!
Meanwhile in ‘Zombieland’, Italy looks like it is just about to take a huge hit on its derivative positions it used to get themselves into the Euro in 1999.Billions to be lost and credibility gone. Looks like it was not only Greece that hid a few things to join the club! And in signs they are getting a bit desperate, Italian financial police raided the offices of dozens of professional soccer clubs, including giants Juventus, A.C. Milan and Internazionale Milano, as part of a broad investigation into tax evasion and other alleged crimes involving player transfers. The raids were ordered by the public prosecutor’s office in Naples and come as the government, which is struggling to service €2 trillion ($2.6 trillion) in debt.
Macau Legend Development is relaunching its Hong Kong initial public offering, but the size of the deal will fall by more than half to up to US$358 million following weak demand from investors.