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A snapshot of today:

What happened today?

ASX 200 down 47.5 points to 5003.8 after an initial fall to 4979. Bargain hunters step in and BHP bounces off 2000c. Japan economic numbers disappoint down 0.86% and China down 0.64%. US futures recover from down 140 to be down 69.

A negative start to the week but most traders held their nerve after the Paris attacks. There was limited panic selling early and volumes were not out of the ordinary at around $4.5bn. The expected drop came and went as bargain hunters appeared after an early 72 point fall. BHP was hit hard early(low of 1990c) but found support at 2000c. News from Japan their economy had slipped back into yet another recession helped spur hopes of further stimulus and kicked in mid-morning although the market traded sideways for the rest of the session before a closing sell off.

Here is a short term chart of the ASX 200. As you can see we remain in some sort of technical downtrend channel having failed to really break the downtrend in late October. Commodity prices have been sinking as the US dollar strengthens ahead of a potential December rate rise.

  • The banks eased around 1% with REITS falling in sympathy. General Property Trust(GPT) -3.49%,National Storage (NSR) -4.35% and Charter Hall Group (CHC) -2.49% amongst the worst.
  • BHP -0.64% was again the focus as it traded below 2000 cent before a rebound waned into the afternoon close.
  • Gold stocks were one of the few green sectors on the screen as bullion rose on safe-haven buying. Newcrest (NCM) +2.79%, OceanaGold Corp (OGC) +4.63%,Perseus Mining (PRU) +4.41% and St Barbara (SBM) +7.79%. Material stocks were easier RIO -2.55% and Fortescue Mining (FMG)-1.32% and South32 (S32) -3.09% continuing to test the years low.
  • Energy stocks were positive with Santos (STO) +4.03%, Oil Search (OSH) +2.72% and Origin Energy (ORG) +2.95%. LNG +14.56% was a standout on positive EIS news.
  • Industrials were generally weaker with Macqaurie Atlas Road (MQA) -1.03% after selling their stake in the Chicago Skyway for US$2.84bn.
  • Travel stocks slipped slightly after the attacks in Paris. Flight Centre (FLT)-2.3%,Webjet (WEB)-1.14% and Ardent Leisure (AAD) -1.14% (local tourism). Airlines were a tad weaker too, Virgin Australia (VAH) -6.52% and Qantas (QAN) -1.66%.
  • Consumer stocks were weaker Woolworths (WOW) -1.83% and Wesfarmers (WES) -0.86%. Good to see Websters(WBA) +6.19% bounce back from their recent nut sell off. Milk stocks also creaming it with A2Milk(A2M) +2.44%, Bellamy’s (BAL) +5.6% and of course Blackmores (BKL) +3.59%. In retailers Automotive Holdings (AHG) -3.57%, Adairs (ADH) -5.39% and the Reject Shop (TRS) -3.89% some of the worse performers in a soggy sector.
  • Speculative stock of the day Velpic (VPC) +44.07% up again following their re-listing last week and the push into e-learning cloud-based videos.

Corporate News

  • Tabcorp (TAH) -0.68% and Tatts Group (TTS) +3.32% confirmed thye had held merger talks recently but had been unable to agree to merger terms.
  • Elders (ELD) -6.65% as the group posted a $38.3m profit up from $35.3 last year. Debt has fallen from $1.4bn in 2008 to $136.3 m. Higher livestock prices and an improvement in cattle and wool volumes meant the core agency services business run by Elders delivered the biggest jump in profits of the business units, notching a $16.3 million improvement compared with last year. However commentary was cautious with the survival period over and now looking for growth as drought conditions are hurting some parts of their business in Queensland.

A great turnaround in Elders

  • Media reports that Woodside (WPL) -1.3% are looking to buy the PNG government’s stake in Oil Search and would then offer a better scrip bid to Oil Search shareholders.
  • Arrium’s (ARI)-0.0%% Whyalla steelworks will shed as many as 250 jobs as part of a $100 million cost-cutting drive in the midst of a global steel glut. The South Australian plant, owned and operated by Arrium subsidiary OneSteel, is one of Australia’s only two operating blast furnaces and has the capacity to make 1.2 million tonnes of raw steel a year.
  • NZ finest Fonterra (FSF) +1.82% has updated the market with earnings forecasts raised from 40-50 cents to 45-55 cents.
  • Liquefied Natural Gas (LNG) +14.56% bucked the downward trend in eth energy sector after they announced the major contract pricing for its US LNG export project. The project has been costed at $6.11bn for four LNG trains with capacity of around 2mtpa each. They also announced the final EIS study that found no adverse environmental impact.
  • Mesoblast(MSB) -38.42% have crashed as they failed to raise money in the US at prices that the market had hoped. Initial expectations of around US12.10 a share were dashed with appetite around US$8 instead. They raised $95.8m from the IPO.
  • Norwood Systems (NOR) went into a trading halt today when they announced a capital raising for 65 m shares at 8 cents with another 18.7m shares available to existing shareholders.
  • Starpharma (SPL) +24.14% as results from their novel antibody treatment showed tumour regression and 100% survival in an ovarian cancer model. These results outperformed their rivals with Roche’s Kadcyla and Herceptin.
  • BG Group and its Asian partners in the $US20.4 billion Queensland Curtis LNG venture have given the go-ahead for a further $1.7 billion of investment to drill up to 400 more wells to maintain gas supply. Drilling for the Charlie project will take place during the next two years in permits west of Wandoan in the Surat basin, with Leighton Contractors winning the main contract to carry out the work, which will create up to 1600 jobs. Drilling will take place during the next two years in permits west of Wandoan in the Surat basin, with Leighton Contractors winning the main contract

Economic News

  • New car sales fell in October after a strong result in September. ABS data showed 96,925 new vehicles were sold in October, seasonally adjusted. That was down 3.6 % from September when sales had jumped 5.9 % to top 100,000 for the first time.

In Asia

  • After all the money the BOJ and the government has thrown at the economy, it still does not seem to be working. Japan’s economy contracted in the third quarter on sluggish business investment, the economy fell into its second recession since PM Abe took office in December 2012.Gross domestic product declined a larger than expected annualised 0.8 % in the three months ended September 30, following a revised 0.7% drop in the second quarter. Economists had estimated a 0.2 % decline for the third quarter.
  • In China, margin requirements will be raised to 100 % from 50 % starting on November 23, the Shanghai and Shenzhen bourses said. The rule change means that investors with 1 million yuan ($220,000) in their account are limited to borrowing another 1 million yuan from a broker to buy more shares. Previously, they could borrow as much as 2 million yuan.

Ahead in European Markets

  • FTSE -45.50
  • DAX -93.50
  • CAC -48.50

Clarence

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