Tuesday market report
A volatile but slightly better day today after yesterday’s Iron Ore induced rout. After a tentative start, where the world of Iron seemed to be coming to an end, buyers stepped back into the fray as broking houses talked about buying opportunities. The big ones bounced hard from early lows with Fortescue Metals Group Ltd (A$4.83, -1.8%) having hit $4.66 BHP Billiton Limited (A$35.93, -0.6%) after $35.84 and RIO Tinto Limited (A$61.22, +unch) after $60.75 as the buyers took hold. However after the Japanese Central bank came out with more of the same it did wilt a little towards the death closing up 2 points at 5414, highs of 5433 and lows of 5404. Lazarus would have been proud! Resource stocks were generally easier as fears from China were lingering, Gindalbie Metals Ltd (A$0.085, -6.6%),Cudeco Limited (A$1.61, -7.5%),Brockman Mining Limited (A$0.052, -7.1%),Mineral Resources Limited (A$11.85, -3.4%), falling on lower commodity prices. Also gold stocks continued their quarantine period led as usual by Newcrest Mining Limited (A$11.39, -1.0%) but falls too for Evolution Mining Limited (A$0.92, -3.7%), Kingsgate Consolidated, Silver Lake Resources Limited (A$0.445, -3.3%), Beadell Resources Limited (A$0.725, -4.0%) and others. Financials though held their nerve with good gains across the board for the banks and insurers the standouts with QBE Insurance Group Limited (A$12.87, +2.0%) Suncorp Group Limited (A$12.52, +0.8%) and Westpac Banking Corporation (A$34.29, +1.5%).
Defensives fared less well with Wesfarmers Limited (A$43.46, -0.3%) and Woolworths Limited (A$36.64, -0.1%) failing to launch but good old Telstra Corporation Limited (A$5.08, +1.0%) did very well. In industrials some of the fizz left Leighton Holdings Limited (A$22.14, -4.1%) and others like Transfield Services Limited (A$0.805, -5.3%) suffered as did Skilled Group Limited (A$2.99, -5.1%), Downer EDI Limited (A$4.95, -4.8%) and Toll Holdings Limited (A$5.33, -1.3%). Media stocks were mixed with APN News & Media Limited (A$0.605, +1.7%) good but Seven West Media Limited (A$2.07, -4.6%) took a tumble along with Fairfax Media Limited (A$0.96, -2.5%) and Ten Network Holdings Limited (A$0.34, -2.9%).
Big winners today included QBE Insurance Group Limited (A$12.87, +2.0%),#ZIM#,Country Road Limited (A$10.00, +2.6%),Westfield Group (A$10.44, +2.4%),Fisher & Paykel Healthcare Corporation Limited (A$4.02, +2.3%) and Independence Group NL (A$4.22, +1.2%) whilst in the losers club were Lynas Corporation Limited (A$0.27, -8.5%) whacked after half year accounts released, Energy World Corporation Ltd (A$0.285, -8.1%),Pacific Brands Limited (A$0.535, -4.5%)(well they did run yesterday),Seven West Media Limited (A$2.07, -4.6%),Bradken Limited (A$4.29, -4.5%),AWE Limited (A$1.485, -4.8%) (drilling update didn’t help)and Mineral Resources Limited (A$11.85, -3.4%).
Volume was around $4bn which was a little lacklustre after yesterday’s promising start. Gold was trading better at around $1341 and the Aussie dollar around 90.2 and Bitcons still around $700 despite rumours of fraud and financial misappropriation at MtGox Bit exchange.
Asian market firmed then sagged a little as BOJ comments did nothing to soother the savage beast.Tokyo up 0.27% and Shanghai up 0.87%
Stocks and Stories
Business conditions fell to zero in February from 5 points in January and 4 points in December, NAB said. Business confidence slipped back to their December levels of 7 points after rising to 9 points in January.
In house stocks today AWE Limited (A$1.485, -4.8%) had some drilling issues at its Pateke 4H well, Buru Energy Limited (A$1.385, unch) are out ion roadshow duty trying to drum up some interest, as were emerging South African Coal producer Universal Coal PLC (A$0.13, -3.7%).
Lynas Corporation Limited (A$0.27, -8.5%) posted a rise in its first-half loss and flagged it needs additional funding. The first-half loss came in at $59.3 million, after a loss of $54.5 million a year ago. Sales were just $14.6 million, below expectations of $15 million.
OrotonGroup Limited (A$3.58, -5.3%), still suffering from the loss of its flagship brand Ralph Loren , has reported a 24 per cent fall in net profits from ongoing operation over the six months to January 25, and an equivalent drop in EBIT against the previous corresponding period to $8 million.
Seems that people power can work as the Facebook campaign to buy more Aussie tinned tomatoes and peaches pays off for SPC Ardmona with news of a $70m five year deal with Woolworths Limited (A$36.64, -0.1%) today.
The Bank of Japan has voted to continue with its money printing but has revised down its export guess due to weakening shipments to Asia.
Tomorrow’s News Today
A report yesterday showed aggregate financing in China dropped to 938.7 billion yuan ($153 billion) last month amid a crackdown on shadow lending, down from January’s record 2.58 trillion yuan and less than the 1.31 trillion yuan median estimate of analysts surveyed by Bloomberg News.
Currency wars continue across the globe as everyone wants a weak currency to boost exports. Last night one of the Bank of England’s Deputies said any further strength in Sterling would be “unwelcome”.
Seems that not all UK residents are feeling good about things despite better numbers as the growth in selling human organs on Facebook is worrying. One guy put out a call for expressions of interest in a Kidney and got 11 replies! There is a specific Facebook page!
Chinese courts acquitted a total of 825 people out of almost 1.16 million verdicts last year, the Supreme People’s Court says – a conviction rate of 99.93 per cent.
As the world watches the Crimea for further escalations, it will be interesting to see what kind of voter turnout they will have there. Suspect 120% is not out of the question with 120% voting for RasPutin and Russia!
And here is a conundrum. It seems that Kyle and Jackie O are killing their opposition now they have moved to Kiss! Not good for Southern Cross Media Group Limited (A$1.40, -2.8%) where 2day FM copped a drubbing. Hardly surprising really. Who would listen to Merrick! Still even more worrying is who would listen to Kyle and Jackie O?