A quiet and dull start to the trading week after a mini rout on the Dow and elsewhere last week. Early nerves were shrugged off and some bargain hunters emerged to catch the knife. After bottoming at 5524 early we saw a good rally on thin volumes into the close. In the end we closed down 15 at 5541 with financials the biggest drag in the market. Maybe the media reports of our very own Glass-Steagall separation of retail and market activity was enough to scare a few investors. Australia and New Zealand Banking Group Limited (A$33.34, -0.7%) and Westpac Banking Corporation (A$33.85, -0.6%) were the biggest losers with insurers AMP Limited (A$5.35, -0.4%),Insurance Australia Group Limited (A$6.14, -0.8%),#AQBE# and Suncorp Group Limited (A$14.09, -0.5%) feeling unloved in that sector. Property trusts were mixed with #SCG# defying gravity and putting on the ritz. News that Portugal is trying to solve their latest banking tragedy seemed to help the markets as Banco Espirito Santo are going to be split into “Good” Bank and ‘Bad”Bank it appears. The Bank of Portugal is pumping in over $6bn to fix it up with investors and bind holders taking the pain.

In resource land, things were generally firmish ,Fortescue Metals Group Ltd (A$4.74, +1.3%) improved,BHP Billiton Limited (A$38.30, -0.3%) fought back from bigger early losses and the minnows like Atlas Iron Limited (A$0.71, +9.2%),Mount Gibson Iron Limited (A$0.745, +4.2%) and BC Iron Limited (A$3.40, +2.4%) staged good recoveries. Golds were mixed though with Kingsrose Mining Limited (A$0.455, -12.5%) whacked but others to the better included AngloGold Ashanti Limited (A$3.65, +2.8%).Metals X Limited (A$0.245, +6.5%) had a good day after announcing areal with Southern Gold Limited (A$0.01, +11.1%) whilst Syrah Resources Limited (A$5.22, -3.2%) and Sirius Resources NL (A$3.90, -2.7%) slipped on profit taking.

Energy stocks were tinged with red Oil Search Limited (A$9.30, -1.3%),Santos Limited (A$14.12, -1.1%) and Origin Energy Limited (A$14.09, -1.0%) but Woodside Petroleum Limited (A$41.93, +unch) were better following the ‘NO” vote on Friday for the proposed buyback.

In the industrial landscape, Treasury Wine Estates Limited (A$5.15, +4.0%) got another bid from private equity at $5.00 but weaker tone to the sector ,despite retail sales edging higher Harvey Norman Holdings Limited (A$3.05, -0.3%) lost ground but JB Hi-Fi Limited (A$19.75, +0.8%) and Myer Holdings Limited (A$2.38, +1.3%) to the good,following yet another mid year sale(really) hitting the stores. Given that DJ’s looks set to sell some property assets ,it will be interesting to see if others follow.Telstra Corporation Limited (A$5.43, -0.2%),Wesfarmers Limited (A$43.35, +0.1%) and Woolworths Limited (A$36.49, +0.1%) showed little change today.

Volume was woeful even for a bank holiday Monday at around $2.4bn.Finishing with a gold were Mount Gibson Iron Limited (A$0.745, +4.2%),Atlas Iron Limited (A$0.71, +9.2%),Treasury Wine Estates Limited (A$5.15, +4.0%),Arrium Limited (A$0.84, +4.3%),McMillan Shakespeare Limited (A$9.82, +3.6%),Pacific Brands Limited (A$0.57, +3.6%) and #SCG# in the bugs while #GOR#,HFA Holdings Limited (A$1.52, +5.6%),Tap Oil Limited (A$0.655, +11.0%) in the smalls all did well. Failing to qualify today were Mesoblast Limited (A$4.07, -4.5%),Aquarius Platinum Limited (A$0.435, -1.1%),Bt Investment Management Limited (A$6.52, -2.7%),Syrah Resources Limited (A$5.22, -3.2%) and Air New Zealand Limited (A$1.65, -5.4%) and Newsat Limited (A$0.145, -14.7%) and my little ld Unilife Corporation (A$0.43, -11.3%) in the small caps.

Tokyo fell 0.86% HK up 0.3% and Shanghai pushed up 1.3%.Aussie dollar was 93.20 whilst Digital tulips $620 and gold $1292.

Stocks and Stories
Fellas, fellas, its Diggers and Dealers!Luckily the resource sector has picked up a little otherwise they would be drinking more to forget their troubles as opposed to celebrating their successes.

Gold sector takeovers are at a three year high.

Seems Macquarie Group Limited (A$57.81, +0.2%) is still in the sight of the media and regulators on their alleged ‘Penske’ File and more worryingly their other compliance breeches and culture of “commission first, avoid questions later” philosophy.

Crown Resorts Limited (A$15.82, -1.1%) is heading back into Las Vegas with the purchase of 34 acres in the homeplace of casinos.

Roc Oil Company Limited (A$0.675, +7.1%) has received a 69¢-per-share, all-cash offer from Chinese giant Fosun Group, with Roc Oil’s board recommending the proposal.

Retail sales rose 0.6 per cent, seasonally-adjusted, in June, reversing two months of falls or flat sales linked to the warm start to winter and the harsh budget.

Growth in China’s services sector slipped to a six-month low in July as new orders rose at their weakest rate in at least a year, data indicated. The official Purchasing Managers’ Index (PMI) for the non-manufacturing sector slowed to 54.2 in July from June’s 55.

Tomorrow’s News Today
Looks like the WTO Free Trade deal is just about broken down as India scuppers plans with it’s refusal to back a deal unless it included concessions allowing developing countries freedom to subsidise and stockpile food.

The People’s Bank of China warned that the country’s credit and money supply have increased rapidly and indicated that it will refrain from broader monetary easing to support growth.“The total debt level has been rising relatively quickly,” the PBOC said in its second-quarter monetary policy report on Aug. 1.

Euro deflation is a very real concern.Prices rose in the single currency area by 0.4% in July, from 0.5% in June.Couple that with a modest ,very modest fall in unemployement in the Euro zone to 11.5% and it seems that Super Mario had better call Ghostbusters!Running out of conventional options six years on from the GFC.

Indian police have arrested the chairman of state-run Syndicate bank, Sudhir Kumar Jain, and several others over allegations of bribery. Mr Jain has been accused of taking bribes to raise the credit limits of firms.

100 years ago today Britain declared war on Germany.Prior to that the London Stock Exchange was closed for five months!

Clarence

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