Celebrations in equity markets here as PM Abe won a majority in the Upper House ensuring more support for his radical plan to print money in Japan. Commodities were firmer and the sense of optimism and confidence ensured a very positive start to the session. We pushed up way past 5000 and topped out around 5026 before the inevitable profit taking set in.

5000 still looks to be magical number and the market settled around there today before we get more economic data on Wednesday on inflation and the outlook for a rate cut.

Usual suspects were in the spotlight with financials leading the way along with other defensives. Banks were the stand out green blob again today led by Westpac Banking (A$29.40, +0.5%) along with insurers QBE Insurance Group (A$16.50, +2.2%), AMP (A$4.68, +1.1%) and Investment Banks like Macquarie Group (A$45.50, +3.3%) ahead of their numbers later this week. Even resource stocks joined the party with BHP Billiton (A$34.12, +0.8%) marginally higher but Newcrest Mining (A$11.95, +7.5%) enjoyed good gains on the back of a firmer Gold price. Other resource stocks to head for the high ground today included RIO Tinto (A$56.55, +0.6%), Mount Gibson Iron (A$0.585, +2.6%), Oz Minerals (A$4.51, +8.7%), Perilya (A$0.19, +18.8%), Iluka Resources (A$10.88, +1.7%) and Independence Group NL (A$3.24, +6.9%) as commodities toasted Abe. However Fortescue Metals Group Ltd (A$3.68, -1.1%) missed out on the Moet today along with Orica (A$17.61, -3.2%) still suffering after last weeks falls.

In defensives Telstra (A$4.94, +0.6%) seem to have recovered from the Asbestos related weakness and the big fat juicy dividend is beckoning for loyal shareholders. Wesfarmers (A$39.44, +1.3%), Woolworths (A$33.51, +0.6%), Treasury Wine Estates (A$4.84, +1.5%) and Metcash (A$3.68, +1.4%) also in the green today as were infrastructure stocks like Macquarie Atlas Roads Group (A$2.26, +8.7%), APA Group (A$5.95, +0.8%), Duet Group (A$2.31, unch) and Energy World  Ltd (A$0.555, +9.9%). Energy stocks also had a positive start to the week led by Woodside Petroleum (A$38.23, +1.3%) , Santos (A$13.88, +1.0%), Origin Energy (A$12.84, +1.3%) and even little old Dart Energy (A$0.14, +21.7%) had a stunning day.

On the fun side of the island today were Linc Energy Ltd (A$1.945, +12.4%), Oz Minerals (A$4.51, +8.7%), Beadell Resources (A$0.76, +8.6%), Regis Resources (A$3.55, +7.6%), Ainsworth Game Technology (A$3.62, +4.6%), G8 Education (A$2.78, +4.5%) and even David Jones (A$2.57, +4.5%) while on the Dark side of the Moon we had Ten Network (A$0.28, -5.1%) still struggling much like the Australian Cricket team, Leighton (A$16.32, -5.1%), Orica (A$17.61, -3.2%), Incitec Pivot (A$2.69, -2.9%) and Virgin Australia (A$0.45, -3.2%) after the issues at the weekend.

Volume was pretty much in line with past sessions heading into reporting season.

Regional markets were mixed with Japan posting small gains whilst China small losses as we closed.

Stocks in the news

More good news today from Linc Energy Ltd (A$1.945, +12.4%) following another production update from Cedar Point.Banging on the door of $2.00!

And the largest LIC, AFI, has recorded a 10 per cent rise in profit but says caution is needed in the local stock market. It made a net profit of $242.8 million in the 2012-13 financial year, up more than 10 per cent from the previous year.

The chief executive of cosmetics maker Phosphagenics (A$0.105, -4.5%) has resigned as the company investigates apparent irregularities in its financial accounts. Phosphagenics’ board suspended Esra Ogru on July 1, after it discovered apparent irregular transactions in the company’s invoicing and accounting records.

In house stocks G8 Education (A$2.78, +4.5%) had a good day following a presentation on their note issue and following on from their upgrade a week ago.

BC Iron (A$3.56, -0.3%) reported a record production run at its joint venture Nullagine project it operates with Fortescue. The Nullagine Joint Venture project in Western Australia’s Pilbara region shipped 1.6 million wet metric tonnes in the June quarter, marking a 12 per cent increase on the corresponding period in 2012.

In economic news from China, their new leaders took the  biggest step yet to move the nation’s financial system toward market-set lending rates heightening focus on what the central bank says is an even tougher reform: lifting restrictions on savers’ returns.

The People’s Bank of China ended a floor on borrowing costs previously set at 30 per cent below the benchmark, it said July 19. The limit on mortgage rates will stay to curb property speculation, the PBOC said. Also unchanged was a 10 per cent limit on what banks can offer over PBOC-set deposit rates.

Tomorrow’s News Today

Hard to fight one Fed, let alone a whole sag of them as G20 ministers vowed to put growth before austerity. They also said they would need to adjust stimulus with care in order to avoid volatile markets! So keep the presses running boys!

We also get the (Not So) flash HSBC PMI this Wednesday so lots of focus on that number.

One of the US’ largest hedge funds SAC Capital Advisors is in strife as its founder Steven Cohen, 57, faces civil charges over what the US government has called one of the biggest such fraud cases ever. Mr Cohen did not properly supervise two traders who engaged in illegal insider trading, the SEC alleges.

There have been seven new infrastructure projects approved by the Chinese government in the last week. Good news for iron ore and good news for RIO.

Here’s something to think about for the forgotten Uranium sector, Gus Simpson from Peninsula had this  to say recently. “As I speak there are 67 new nuclear power stations under construction; that’s the most at any single time in history. And there are another 167 nuclear power stations that will be built over the next decade on top of those 65. That is a renaissance.” – Not that positive for Coal but maybe some bombed out Uranium stocks worth a look perhaps.

Big news in steel land, ArcelorMittal (MT) and Posco’s decisions to scrap $12 billion of proposed steel projects in India and delays in building plants by Tata Steel Ltd. (TATA) and its peers will probably cut the nation’s 2020 capacity target by a quarter.

Finally, Pacific Investment Management Co.’s Bill Gross said he reckons the Fed won’t tighten monetary policy until 2016 at the earliest. Long after Ben has left the building.

That is all.

Clarence

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