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A snapshot of today:

 

What happened today?

After a strong start, the ASX 200 slides to close up just 3.1 points at 5242.3, with a bank rally runing out of steam. Chinese services PMI helps Asia, together with 6.5% growth commitment. Shanghai up 2.7% and US Futures up 1. AUD 72.01c.

The market burst out of the gates today faster than the Prince of Penzance, but unlike the horse it could not keep the pace to the finish line. After a high of 5313 straight after the opening, the market see-sawed down for the rest of the day, closing just ahead at 5242, 71 points off the high and after turning negative at one stage. Resources once again outshone the banking sector with BHP the stand out on higher commodity prices. Gold stocks fell hard after bullion dropped overnight, but rallied equally hard as gold in Asia fought back.

  • Miners were the best sector, continuing to attract interest with South32 (S32) +2.42%, RIO +0.47% and BHP +1.95%. Alumina (AWC) +5.75% and Fortescue Mining (FMG) +1.43% headed up the second liners with even Lynas Group (LYC) +11.86% moving higher.
  • Energy stocks  were mixed with Beach Petroleum (BPT) +1.59%, Paladin(PDN) +4.0% and Senex (SXY) +5.13% outperforming the bigger players like Woodside(WPL) +0.23%, Santos (STO) -3.54% and Oil Search (OSH) +1.01%.
  • Gold stocks recovered early losses after the fall in bullion last night. Evolution Mining (EVN) +1.08% at 140.5c after touching 132.5c and Northern Star (NST) +1.96% to 258c after hitting 240c. Kingsgate Consolidated (KCN) +14.17% turned a sixpence from a low of 63c to close near its high at 72.5c.
  • Industrials were mixed after strong early gains evaporated. Dicker Data (DDR) +10.47% had a great day following a market update while retailers also did well.Dick Smith (DSH) +8.61% finally bounced after a shocking week, AP Eagers(APE) +3.49%, Lovisa Holdings (LOV)+3.22% and Trade Me (TME) +2.6%. Media stocks continued their run with Southern Cross (SXL) +5.39%,Nine Entertainmen (NEC) +3.23% and Seven West Media (SWM) +2.17%.
  • Builders were mixed after the lead from the CSR results. Brickworks (BKW)+1.52%,Fletcher Building (FBU)-0.71%, and Adelaide Brighton (ABC)+1.19%. James Hardie (JHX)-3.67% took its cue from a disappointing number from a US builder last night.
  • Healthcare was once again mixed to negative with CSL -0.4%, Cochlear (COH) -0.65%, Australian Pharma (API) -4.3% but Primary Healthcare (PRY) +1.35% andEstia (EHE) +1.06% doing better.
  • Telecom companies were also weak again as both Telstra (TLS) -1.3%,Hutchison(HTA) -4.21% and TPG Telecom (TPM) -1.08%
  • Financials were again laggards. Banks rallied well in the morning but once again slipped away as investors focused on growth over yield. National Bank (NAB) -0.63% and Australia and New Zealand Bank (ANZ) -0.48% the worst of the big four. Pressure will be back on as the banks go ex-dividend in the next week or so (NAB ex-dividend 5 November 99c, ANZ ex-Dividend 6 November 95c, WBC ex-Dividend 11 November 94c.) Wealth managers were also under pressure again,Perpetual Limited (PPT) -1.53%, Platinum Asset (PTM) -0.66% and Challenger Limited (CGF)-1.78%.

Corporate news

  • CSR +4.12% reported good numbers today and more importantly forecast FY16 to be at the top end of the estimates. They reported a 32% jump in profits to $92.4m and the dividend up 35% to 11.5c. Sustained growth in new home construction continues to underpin business conditions.
  • Echo Entertainment (EGP) -6.25% as revenue from high rollers disappointed in the first four months of the year, with international VIP revenue down 33.8%. However domestic revenue rose 8.7%. A low win rate was to blame apparently.
  • The old Westfield Malls group, Scentre Group (SCG) +1.22%, said its comparable specialty store sales rose 5.8% for the first nine months of the calendar year. By comparison, the key metric of comparable specialty sales rose 6.1% in January-June. CEO Peter Allen said the $21.8bn group had delivered “continued strong portfolio performance”. SCG confirmed the full-year distribution at 20.9c and funds from operations at 22.5c, an increase of 3.5% on last year.
  • NIB Holdings (NHF) +3.37% after it said that profits would beat previous guidance of $85-90m and would now be around $90-100m. It now has 1,000,000 policy holders.
  • Downer EDI (DOW) +0.83% has warned that challenging conditions will continue into 2016. Managmeent did reaffirm guidance though for $190m in net profits.
  • Mesoblast (MSB) has filed an application to list on NASDAQ.
  • Treasury Wine Estates (TWE) +2.54% following approval from US anti-trust authorities on their purchase from Diageo.
  • Seems it is buy the pizza, sell the fat on the AGM comments. Domino’s Pizza (DMP) -0.50% slipped on profit taking after a big run into the AGM meeting this morning. NPAT up 40% to $64.0. Revenue up 19.3%. Full year dividend was 51.8 cents up 41.1%.
  • The speculative stock of the day was Leigh Creek Energy (LCK) +41.18% following a rerating after the quarterly report last week.

Economic News

  • Retail sales rose 0.4% in September, spurred by a jump in spending at cafes and restaurants.
  • The trade deficit narrowed to $2.3bn in September from $2.7bn a month earlier, thanks to a 3.4% surge in export growth to match the strongest month in almost two years.

In Asia

Stronger markets across the region as Japan came back online after the Culture Day holiday. The Nikkei was boosted by the biggest IPO this year in Japan Post. Nikkei up 1.89%.

  • Japan Post and Japan Post Bank have soared on debut after the country’s biggest privatisation since the 1980s raised ¥1.4tr ($16bn) for the government.
  • Japan Post Holdings debuted at ¥1631 per share, 16.5% higher than its initial public offering price of ¥1400. Japan Post Bank opened at ¥1680, up 15.9% from its IPO price of ¥1450. Japan Post Insurance rose to ¥3160 per share up a huge 43%.
  • Also in Japan, Takata has fallen 20% as Honda has dropped the air bag supplier following a $US97m fine over faulty airbags.

Meanwhile the Shanghai market was very strong, up 3% after the Caixin Services PMI came in at 52.0 going against the official PMI numbers last week.

  • The Chinese and Taiwanese government will meet this weekend for the first time in 70 years. In Singapore, neutral ground.

The Plenum statement was out today and Xi Jinping has announced “a stronger online battleground for ideology and culture, to promote a positive Internet culture, to purify the cyber environment and to speed up the integration of the traditional and new media.” But more importantly for the markets, he also announced a bottom line goal of 6.5% GDP for the next five years.

Ahead in European Markets

  • FTSE +23 points.
  • DAX -14.50 points.
  • CAC +19.50 points.

Clarence

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Get a Global take on things at http://www.ntmarkets.com

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