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A snapshot of today:
What happened today?
ASX 200 closes up 98.5 points, back to 5150.5 as resources shine. Thin volume due to a public holiday in NSW keeps traders at the beach, but the path of least resistance is up at the moment. China still closed but the rest of Asia firm. Japan up 1.76% and Dow futures down 4 points. Glencore up 60% in Hong Kong.
A very strong day as the ASX200 blasted out of the blocks this morning following positive leads from overseas.
Thanks to Shane Oliver (AMP). Parallels to October 2011 perhaps.
- Across the board rises with big miners performing very strongly. BHP +3.98%, RIO +2.22%, South32 (S32) +3% and Iluka Resources (ILU) +2.82% all starring. Gold stocks were a highlight following a big move in the gold price on Friday – a US rate rise now seems less likely given the US jobs numbers. The Australian gold sector is the star performer this year up around 32%. Newcrest (NCM) +9.09% today, OceanaGold Corp (OGC) +7.46%, Evolution Mining (EVN) +7.51% and Northern Star (NST) +5.95%.
- Energy stocks were also strong, led by Santos (STO) +5.73% and Woodside (WPL) +3.08% but US gas hopeful Liquefied Natural Gas (LNG) +15.6% was the standout.
- Banks and Financials were in demand but underperformed slightly. National Bank (NAB) +1.66% was the best of the bunch. Insurers and wealth managers also good as expected, AMP +1.25%, QBE +2.6 % and Macquarie Group (MQG) +1.14%.
- In Industrials, infrastructure and utility stocks were popular, bouncing hard. Transurban (TCL) +2.02%, Sydney Airports (SYD) +2.01%, APA Group (APA) +2.79% and Brambles Limited (BXB) +3.11% all enjoying the Labour Day sunshine.
- Consumer stocks did well. Wesfarmers (WES) +1.86% outperformed Woolworths (WOW) +1.41% but food stocks Select Harvest (SHV) +2.71%, Tassal Group (TGR) +4.07% and Bega Cheese (BGA) +2.67% all showed a clean pair of heels.
- Building stocks were firm too. James Hardie (JHX) +2.46%, Fletcher Building (FBU) +1.74% and Boral (BLD) +2.52% all doing well.
- Speculative star today was Walkabout Resources (WKT) +57.14% on drilling reports of massive and wide graphite intersections at their Lindi project. On the negative side, Ashley Services (ASH) -37.7% had a massive boardroom shakeup coupled with a 10% profit downgrade and a strategic review.
- Origin Energy (ORG) is still suspended. The company announced it had successfully raised $1.35bn with strong institutional demand at 400 cents, with the 8% not taken up by entitlements clearing at 520 cents. A strong vote of confidence with the retail offer opening October 13th and closing on 26th. Expect some weakness during this period.
- Bank of Queensland (BOQ) +0.43% is facing a class action lawsuit from customers who lost funds after the bank allegedly failed to prevent transactions ordered by a banned financial adviser. Shine Lawyers said it was starting a class action against BoQ on behalf of customers who lost hundreds of thousands of dollars and were seeking compensation.
- Kingsgate Consolidated (KCN) -7.86% was one of the few gold miners to fall. News out on Friday of continuing trouble in Thailand on alleged corruption was compounded by news that the Thai exchange has rejected the proposed IPO of its subsidiary Akara Resources.
- Veda Group (VED) is currently in a trading halt pending an increased offer from US Equifax. The stock will be back Tuesday.
- Carsales (CRZ) +1.41% has completed its acquisition of a 65% stake in Mexican Soloautos. The deal will be funded by existing debt facilities and is not expected to add any material earnings in the first year.
- US hedge fund Litespeed Management has increased its stake in Bradken (BKN) +3.32% to 11.91%.
- Aurizon Holdings (AZJ) +2.34% has received notices from seven of the eight Wiggins Island Rail Project customers looking to reduce the financial exposure of those companies. Aurizon has provided guidance that the annual impact would be around $0-27m over the twenty year contract period.If the notices are valid, the current year could be impacted by around $10m.
- The monthly survey by ANZ Banking Group showed total job advertisements rose 3.9% to 153,778 per week on average in September, adding to the 1.3% gain in August. Ads were up 12.8% on September last year, better than the 8.8% annual pace seen in August and nearing the 14.1% rate set in May.
- TD Securities-Melbourne Institute’s monthly inflation gauge rose 0.3% in September, up from a 0.1% rise in August. The annual pace ticked up to 1.9% from 1.7%, reaching its highest since November 2014.
- The World Bank cut its 2015 and 2016 growth forecasts for developing East Asia and Pacific, and said the outlook was clouded by the risk of a sharp slowdown in China and possible spill overs from expected increases in U.S. interest rates. It expects the developing East Asia and Pacific (EAP) region, which includes China, to grow 6.5% in 2015 and 6.4% in 2016, down from 6.8% growth in 2014. Its previous forecast in April was 6.7% in each of 2015 and 2016. It has cut Chinese growth to 6.9% in 2015 and 6.7% in 2016 from 7.1% and 7.3% respectively.
Chinese markets are still closed due to Golden Week, but Japan was up 1.76% with Hong Kong up 1.74%.
In Hong Kong, Glencore is up 60% on takeover and asset sale talk. Some of Asia’s biggest funds seem to be interested in taking a stake in the company if it becomes available.
- European futures markets are pointing to a strong start with Stoxx 600 futures up 0.49% and FTSE futures up 1.8%
- Retailer American Apparel Inc filed for bankruptcy protection on Monday and said it had reached a restructuring support agreement with 95% of its secured lenders. The company listed assets and liabilities of between $100m and $500m in its bankruptcy filing.
Former Fed boss Ben Bernanke has said that he is disappointed that more people had not gone to jail over the causes of the GFC. Must have a book coming out.