They say that bad news loves company. Sure seems to be true, as the market shuddered today when the Chinese Flash(not so flash really) PMI numbers came through below 50.Not good. Not sure what it really means but any excuse to sell off. Coming hot on the heels of a bad jobs read and yesterdays’ CPI shocker, the bad news is stacking up and the little boy holding his finger in the dyke finally gave up the challenge and walked off to get a Chiko Roll. After opening down and then rallying to square we took the Chinese news hard and at our worse were down nearly 70 points before an afternoon rally helped us close down a mere 57.The biggest losers in the big stocks were the big red bank blob and the materials ie BHP Billiton Limited (A$37.04, -1.6%),RIO Tinto Limited (A$64.67, -0.9%) and Fortescue Metals Group Ltd (A$5.24, -2.1%). There was also some nastiness in insurance stocks with Insurance Australia Group Limited (A$5.60, -2.9%) leading them down following a disappointing guidance from the company this morning.
Most sectors were in the red and on the market map only two stocks stood out Macquarie Group Limited (A$55.75, +1.5%)(broker upgrades) and Amcor Limited (A$10.62, +2.4%) (boxed in) while damage was done in Telstra Corporation Limited (A$5.18, -0.8%), the W’s #WES,Woolworths Limited (A$33.86, -1.0%),Westfield Group (A$10.00, -2.7%) and Woodside Petroleum Limited (A$38.02, -0.3%). Energy shares ran out of juice after Santos Limited (A$14.14, -0.8%) fourth quarter numbers with Origin Energy Limited (A$13.90, -2.5%) and Oil Search Limited (A$8.11, -1.2%) joining the fun. Industrials were also in the dog house Asciano Limited (A$5.62, -2.6%),Transurban Group (A$6.79, -0.6%),Qube Holdings Limited (A$2.05, -2.4%),Macquarie Atlas Roads Group (A$2.79, -1.8%),Toll Holdings Limited (A$5.72, -1.7%),#LEI,#Seven Group Holdings Limited (A$7.63, -3.0%),Computershare Limited (A$11.36, -2.0%) and Brambles Limited (A$9.01, -0.3%). Property trusts took it on the chin too $SGP#,GPT Group (A$3.61, -0.8%),Goodman Group (A$4.75, -3.3%),Mirvac Group (A$1.715, -0.9%) and Westfield Retail Trust (A$3.04, -1.3%). Builders also gave up ground Adelaide Brighton Limited (A$3.67, -2.1%),Csr Limited (A$2.87, unch),James Hardie Industries PLC (A$13.01, -1.2%) and Boral Limited (A$4.73, -0.4%).
Big winners today were pretty hard to come across but #AAI#,Energy Resources of Australia Limited (A$1.25, +0.4%),Fonterra Shareholders’ Fund (A$5.59, +4.7%),Chorus Limited (A$1.36, +1.1%),Aurora Oil & Gas Limited (A$2.83, +1.8%),Sfg Australia Limited (A$0.73, +2.1%),Drillsearch Energy Limited (A$1.42, +2.2%) and Bt Investment Management Limited (A$6.47, +1.7%) impressed whereas losers were everywhere .Energy World Corporation Ltd (A$0.375, -6.3%),Mount Gibson Iron Limited (A$0.96, -5.9%),Kathmandu Holdings Limited (A$3.08, -4.0%),Sirius Resources NL (A$2.14, -4.0%),Independence Group NL (A$3.14, -4.6%),Oz Minerals Limited (A$3.54, -3.8%),Insurance Australia Group Limited (A$5.60, -2.9%),Western Areas Limited (A$2.54, -3.4%) and Beadell Resources Limited (A$0.80, -3.6%) all taking a hit!
Volume was around $4bn, which is starting to get back to normal. Asia took the Chinese numbers badly too, the MSCI Asia Pacific Index fell 0.6 percent to 139.16.Hong Kong down 1.3% while Shanghai was down 0.6% whereas the Nikkei managed to avoid the PMI pothole down only 0.2% as I write this. The Aussie dollar slipped below 88cents and Bitcons were just shy of $1090
Stocks and Stories
Insurance Australia Group Limited (A$5.60, -2.9%) updated the market today revised its fiscal 2014 reported insurance margin to 14.5 per cent to 16.5 per cent – up from the previous 12.5 per cent to 14.5 per cent. The group however lowered its revenue, or gross written premium guidance by 2 per cent. IAG now expects to post 3 per cent to 5 per cent GWP growth, down from the previously flagged 5 per cent to 7 per cent.
Santos Limited (A$14.14, -0.8%) Santos has delivered better sales revenue than expected, despite production slipping lower to 13.1 million barrels of oil equivalent in the December quarter.Santos revenue climbed to a quarterly record of $1.065 million in the December term, which was four per cent better than the September quarter
Newcrest Mining Limited (A$9.13, -2.2%) is on track to be cash flow positive in fiscal 2014, after strong production numbers help drive much lower-than-expected costs. Costs of production suggest it could have free cash flow positive this year at a gold price of $A1450 per ounce. Despite the gold price slipping lower than that over the past six months, Newcrest has shown it is capable cutting its costs, and today reported ‘’all in’’ costs of $A921 per ounce for the December quarter. Better from the departing team! Didn’t help the share price though after the initial rally this morning.
Packers’ Crown Resorts Limited (A$17.70, -0.8%) has received approval from the Sri Lankan government to build a resort in Sri Lanka, but without explicit approval for the casino which underpins the proposed $400 million project. Sure it’s just a formality.
Warrnambool Cheese & Butter Factory Co.Hold.Ltd (A$9.475, +0.6%) is all over red rover as Murray Goulburn(the red Wiggle) accepted the Mounties bid and sold their shares. Milk and Cheese from Warrnambool will now be recoloured beige in honour of their new Canadian owners.
S&P has removed its credit watch with negative implications over Qantas Airways Limited (A$1.105, unch)’ BB+ rating, saying the outlook was now stable.
Whitehaven Coal Limited (A$1.845, -1.9%) says it expects to see a modest drop in prices for its metallurgical coal sales in the current quarter on subdued demand from Asian steelmakers. The company, which posted a 52 per cent rise in December quarter coal sales owing to strong production growth at its Narrabri colliery, forecast an average sales price of $US101 per tonne (fob) for its metallurgical coal, down from $US103 in the last quarter.
News today that Brekkie TV ‘wunderkid’ Adam Boland has resigned from Ten Network Holdings Limited (A$0.35, +1.4%) .Shares actually went up but now it has lost half its audience as his Mum has stopped watching.
In house stocks CSS released an update, New Standard Energy Limited (A$0.175, +9.4%) continued its march higher, IMC fell close to the rights issue price and Nucoal Resources Limited (A$0.023, -14.8%) continued to slide down the mine shaft.
Singos’ Bluetongue Beer is no longer as SAB Miller moved today to close their brewery on the Central Coast and sack the staff and withdraw the brand.
The preliminary reading of 49.6 for a Purchasing Managers’ Index released today by HSBC Holdings Plc and Markit Economics compares with a final figure of 50.5 in December and a 50.3 median estimate of 19 analyst
Tomorrows News Today
Bit of pressure building on Mark (Circus) Carney as the headline unemployment rate in the UK approaches his 7% level where he said rates would start to rise! Apparently “it’s a threshold, not a trigger, and that the BOE sees no immediate need to increase interest rates even if 7% were to be hit in the near future,”
While we are still wrestling with the NBN decision, other countries are moving fast. Actually very fast. South Korea is trialling 5G which will be able to download a movie in one second whereas in the UK, Alcatel-Lucent and BT said speeds of 1.4 terabits per second were achieved during their joint test – enough to send 44 uncompressed HD films a second.
And as if Gold mining in WA wasn’t hard enough Kalgoorlie has been hit with the most rain in 19 years today! Super Pit is now hosting a rowing regatta!
Now I don’t wish to be a party pooper as I am sure every broker and investor will rush out and see the ‘Wolf of Wall Street’…read the book ..hated it. Everything that is wrong with the US markets is in there. Anyway Hollywood has habit of picking the tops. ‘Wall Street’ came out just before the ‘87 crash. “Wall Street II” filmed in 09. Just saying, wish they would stop making movies like this! And more flashing lights! Chinese billionaires’ fresh eyes for art helped Christie’s sell a record £4.5bn of artworks and collectables last year – the highest annual sales of any auction house in history. Ever!
I know no one was watching this but South Korea released its best growth figures for three years. No one cares right?
The Ukraine is getting worse, 5 dead now , with everywhere I hear the sound of marching charging feet boys. Well what can a poor boy do? ‘Cept to sing in a Rock and Roll band. Tick. Ukraine the gateway for Russian oil and gas to Europe? Problem? Maybe!