After a lacklustre start it just got more lacklustre as we awaited the Fed. In the end the market closed down slightly at 5238 down 13.1 points. Financials tried to shrug off the RBA warnings on credit quality but could really get going. Commonwealth Bank of Australia (A$73.98, +0.5%) were the best of the bunch with National Australia Bank Limited (A$34.64, -0.1%) and Westpac Banking Corporation (A$32.52, +0.2%) bringing up the rear. Bear in mind that NAB have rallied nearly 13% since mid-August. News out of the UK on the sale of the UK governments partial holding in Lloyds has been helping sentiment. Other financials like Macquarie Group Limited (A$49.09, -1.5%) also eased as did Platinum Asset Management Limited (A$5.73, -2.1%) and IOOF Holdings Limited (A$8.50, -4.3%) Resource stocks were a little under pressure due to lower commodity prices as RIO Tinto Limited (A$61.70, -1.7%),Fortescue Metals Group Ltd (A$4.47, -3.2%),Atlas Iron Limited (A$0.865, -2.8%) led iron ore stocks down. Golds were once again sitting the bull market out with Newcrest Mining Limited (A$11.98, -2.9%),Silver Lake Resources Limited (A$0.775, -4.3%),Evolution Mining Limited (A$0.80, -5.3%),Kingsgate Consolidated Limited (A$1.64, -3.8%),St Barbara Limited (A$0.545, -1.8%) and Medusa Mining Limited (A$2.05, -1.4%) all under the knife. Nasty fall on physical Gold under $1300 in our time zone not helping the bulls at all.
Energy stocks also eased back on the fall in the oil price with Woodside Petroleum Limited (A$38.43, -0.8%),Oil Search Limited (A$8.54, -1.2%),New Hope Corporation Limited (A$3.88, -3.0%)(no Hope) ,Whitehaven Coal Limited (A$2.06, -1.9%),Paladin Energy Ltd (A$0.51, -6.4%),Santos Limited (A$15.00, unch) and Buru Energy Limited (A$1.72, -2.5%) down.
Once again though telecoms were in demand after yesterday stunning results from Tpg Telecom Limited (A$4.48, +5.9%).iiNet Limited (A$6.27, +5.6%) decided to join in today as did Vocus Communications Limited (A$2.61, +4.8%),M2 Telecommunications Group Limited (A$6.22, +0.6%) although Telstra Corporation Limited (A$4.90, -0.4%) did languish. Not all was good though in tech land as new entrant #ISU# plunged to all-time lows today following its disastrous float earlier this year. Defensives like Woolworths Limited (A$34.56, -0.7%),Wesfarmers Limited (A$41.54, -0.2%) and Csl Limited (A$64.82, -1.0%) were down, down , prices are down.
Wearing yellow jerseys today were Sirius Resources NL (A$2.82, +5.6%),Tpg Telecom Limited (A$4.48, +5.9%)(again),iiNet Limited (A$6.27, +5.6%),Regis Resources Limited (A$3.87, +4.6%)(rethink!)Bt Investment Management Limited (A$4.09, +3.5%) and Oz Minerals Limited (A$4.34, +1.6%). Whilst biggest losers today included Paladin Energy Ltd (A$0.51, -6.4%),Evolution Mining Limited (A$0.80, -5.3%),Village Roadshow Limited (A$6.50, -0.8%),Karoon Gas Australia Limited (A$5.12, -4.3%),Linc Energy Ltd (A$1.425, -4.0%) and IOOF Holdings Limited (A$8.50, -4.3%). Volume was again nothing special at just over $3bn.
Seems we are ignoring Asia today as markets rally across the board before the Fed meeting. Probably best.
Stocks and Stories
Not much out on the news front.
VLA are soaring on news that a significant number of patients responded well to a cancer therapy the company is developing. Viralytics said a phase II clinical trial of its treatment Cavatak on late-stage melanoma patients had already achieved its main goal, even though patients were still being recruited for the study.
RBA official soothes us with talk of no housing bubble in Australia.
Australia still has its AAA credit rating but today S&P cut WA’s credit rating to AA+ amid government spending pressures and revised the outlook to stable.
This is going to be big news later this year. Online jobs portal Freelancer.com is planning an initial public offering in Australia this year after knocking back several attempts to buy it, including a $400 million approach from Japanese recruitment firm Recruit Holdings. There are a growing number of internet start ups in this country that are out there raising money. This will help them big time show the seed to IPO model works and the end game is not just a trade sale. Watch this space as it will trigger a stampede if successful.
Tomorrows News Today
It’s all about the Taper. At 4.15am our time we will get the pronouncement from on high from Uncle Ben. This event has been built up more than when Moses went up the Mount and asked if anyone had a chisel?
I believe we will see tapering start. With the US being Bankrupt in Mid -November on current spending trajectory it would be even harder for Ben to get his message across with all the shenanigans in Washington on extend and pretend on their Visa card.
Citi in the UK have upped their 2014 forecast to 8,000 as Europe and the UK economy recover. Greek PM has declared that in six years the country will be in better shape than before the debt crisis. Had a feeling his nose was growing quite a bit at this point! I’m a real boy!
House prices in Chinese first tier cities have risen 18% in the last year! Looks like a housing bubble is happening everywhere at the moment. Low rates pushing punters into bricks and mortar.
In the US a census report has just put poverty at 46.5m people. It’s the sixth year that this number has not fallen. Worse affected are Black, Hispanic and US-Asians. Seems not everyone is doing that great on the Dows rise! Maybe Food stamps and Poverty would be better measures for Uncle Ben!
India’s love affair with Gold just got more expensive as India has increased the duty on imports of gold jewellery to 15% from 10%, in its latest attempt to curb the demand for the precious metal. Gold imports are also one of the biggest contributors to India’s widening current account deficit. They are the biggest consumers of Gold in the World!