A snapshot of today:
What happened today?
ASX 200 closes on a ‘Melt Up Day’ up 99.6 points at 5266.1 on bargain hunting. No cut from the RBA and BHP and banks all rally in unison. Good volume at around $6.5bn. Good Futures volume too at 44,000 contracts. China slips a little down 0.12% but Japan better up 0.8%. Dow futures up 100.
A tentative opening, then things just ran and ran with the ASX 200 pushing through the +100 points level at one point, to touch 5279, before closing slightly off the high at 5266.1. The surge in volume on the close last night may well have been the harbinger of more Xmas shopping today. It may be that an international fund is putting money back to work in Australia on renewed confidence on the world stage. Whatever sparked the rally, it was unexpected as overnight leads and commodity prices were uninspiring.
Across the board gains with a solid bounce in the material sector and the golds. Banks and other financials were also celebrating the first day of summer with insurers particularly pleased with themselves. The focus shifted as the morning wore on with the Chinese data dropping around midday hardly interrupting the bulls in full-flight. Then on to the RBA decision at 2.30pm where for the seventh month in a row the RBA kept rates on hold as the ‘chill pill’ takes effect. Back in February for the governor and his team, but unlikely to see any change then either.
- Gold stocks rebounded on a more positive bullion price overnight. Newcrest (NCM) +3.67%, Evolution Mining (EVN) +5.8%, Northern Star (NST) +4.12% and St Barbara (SBM) +4.93%. Other resources did not do so well South32 (S32) +0.42% barely moved the needle but at least we saw gains in OZ Minerals (OZL) +1.49% and Independence Group (IGO) +1.24%.
- Big miners were bouncing back from oversold levels despite Gina Rinehart’s Roy Hill project beginning to load its first shipment of iron ore. BHP bounced back +3.65%, RIO +2.2% and Fortescue Metals (FMG) +1.53%.
- The big four banks rose nearly 2% with Australia and New Zealand (ANZ) +2.36% the stand out. Insurers like Insurance Australia Group (IAG) +2.71% also piled on the points with wealth managers up around 2% too. Macquarie Group up only +1.57% but BT Investment (BTT) +2.57%, Platinum Asset (PTM) +2.73% and Henderson Group (HGG) +2.21%. REITS were a significant winner today, Mirvac (MGR) +1.61%, GPT +2.6% and Dexus Property Group (DXS) +3.52%
- In the industrials both Woolworths (WOW) +3.46% and Wesfarmers (WES) +2.31% shot the lights out today, with more positivity in Metcash (MTS) +13.51% feeding into the sector.
- Day traders’ playthings Slater & Gordon (SGH) +28.11% and Dick Smith (DSH) +25% both provided strong gains as the falls looked overdone. Brave traders only need apply.
- Telecoms turned green, led by Telstra (TLS) +2.43% following its international roaming charges move. Spark New Zealand (SPK) +3.67%, TPM Telecom (TPM) +2.13% and M2 Group (MTU) +2.97% all did well.
- One of the few red spots of the day was Intueri Education Group (IQE) -21.74%. The big bounce yesterday was brought back to earth today.
- Speculative stock of the day: New back door listing Medadvisor (MDR) +52.94% after an investor presentation.
- One to watch too in the recent IPO sphere is Rent (RNT) +18.28% following good traction for its rental market web site. It aims to be the REA for the rental market. Interesting.
Not much today and it showed as ‘TimTamGate’ reared its head. Arnotts has withdrawn the bikkie from the shelves of Coles after the company tried to put through an unexplained 10% price rise that Coles was very unhappy with. Bring on the home brand.
- Australia’s current account deficit narrowed by 12% in the third quarter, seasonally adjusted, increasing the chances that economic growth in the three months to the end of September will at least match forecasts of around 0.7%. The ABS said the deficit on goods, services and capital narrowed by $2.4 billion to $18.1 billion in the September quarter.
- Approvals for the construction of new homes rose 3.9% in October, which was much better than market expectations of a 2.3% fall.
- Over the 12 months to October, building approvals were up 12.3%, the ABS said. Approvals for private sector houses fell 2.1% in the month, and the ‘other dwellings’ category, which includes apartment blocks and townhouses, was up 10.6%.
- House prices fell the most in five years in Sydney, dropping 1.4% after a 12.8% rise in the last 12 months.
Yields are still at record lows despite recent price cooling.
- Iron ore futures in China and Singapore have fallen further on Tuesday as Shanghai rebar sank to a record low on poor demand. Iron ore for May delivery on the Dalian Commodity Exchange was down 0.5% at 294.50 yuan ($US46) a tonne, after touching a near five-month low of 290.50 yuan.
- The Chinese services PMI came in at 53.6, compared to 53.1 the previous month. The services sector is usually a little stronger and has not dipped below 50.
- The official Purchasing Managers’ Index (PMI) fell to 49.6 in November from 49.8, below expectations of no change, but the Caixin manufacturing PMI rose to a better-than-expected 48.6.
Source: Trading Economics
- Macau’s casino revenue fell for the 18th straight month in November, as China’s moves to curb illicit money flows from the mainland deterred the high-stakes players who rely on junket promoters for betting loans. Gross gaming revenue fell 32.3% to 16.4 billion patacas ($2.1 billion).
- Capital spending by Japanese companies surged 11.2% in the quarter from a year earlier, the most in eight years, raising the possibility of an upward revision to GDP.
Ahead in European Markets and the US
- FTSE +38 points.
- DAX +84.50 points.
- CAC +27.50 points.