Happy Christmas. ASX 200 closes up 25.1 points at 5141.8 as BHP finally rallies. Aurizon managed to sneak in a profit downgrade just in time for Christmas. Asian markets mixed as Japan falls 0.16% and China up 0.34%. US Futures down 10. AUD is having a good Christmas at 72.35.

A positive lead from overseas finally gave up some momentum especially in resource stocks which are experiencing a slight dead cat bounce. BHP +3.45% and RIO +4.19% led the way higher. Alumina (AWC) +7.66% and Fortescue Metals (FMG) +2.87% joined in the fun. The market peaked early again and fell back a little due to the downgrade from Aurizon (AZJ) -11.74%. The rise tailed off in the final hours and we limped into the close. Volume was around $3.3bn as we slip into a shortened day tomorrow.

  • Energy stocks also picked up the baton with Oil Search (OSH) +3.74% and Origin Energy (ORG) +2.97%, with Beach Petroleum (BPT) +6.59% the stand out.
  • Tech stocks had a good day. Aconex (ACX) +3.33%, Freelancer (FLN) +2.95%, Objective Corp (OCL) +8.57% and Integrated Research (IRI) +3.41%.
  • Banks and Financials were positive with laggards Australia and New Zealand (ANZ) +0.75% and National Bank (NAB) +0.76% and insurers IAG +0.19% and Suncorp (SUN) +1.72%.
  • Industrials and retailers were firmer, Ardent Leisure (AAD) +3.67% a stand out although Flight Centre (FLT) -1.75% was a rare red. Grocery stocks Woolworths (WOW) +0.51%, Wesfarmers (WES) +0.07% and Metcash (MTS) +1.0% were all expecting a good Christmas.
  • Austal Limited (ASB) -4.78% continued to run into rough seas. Healthcare remained under pressure with CSL -1.04% coming in for some profit taking.
  • Speculative stocks of the Day: Lithium Australia (LIT) +28% before entering a trading halt regarding the appointment of consultants for scoping studies on its NW Australian project.

Corporate News

  • Slater & Gordon (SGH) -6.63% looks to be finishing the year in style with rival lawyers Maurice Blackburn opening registrations for a class action. The stock is down 90% for the least 12 months. Most of the shareholders who will join the class action will be Slater & Gordon employees. Tough Christmas for a few lawyers. How long before Andrew Grech is gone. The media seems to use an archive photo of him which is reminiscent of the Craig Thomson pictures.
  • Aurizon (AZJ) -11.74% has surprised no one really, telling the market that the impact of falling commodity prices had taken its toll. Underlying earnings before interest and tax guidance 1H16 is $390-410m before asset impairments. That was the worrying aspect. Asset impairments of around $215-240m. The company tried its best to spin it as a one off but the market wasn’t in the mood to buy in.
  • Lend Lease (LLC) +1.83% announced it had sold a 25% stake in Tower One at Barangaroo South to an Asian Infrastructure investor. Both price and identity were suitably vague. Its equity commitment will fall from $525m to $175m.
  • MGM Wireless (MWR) -27.13% disappointed the market with a slight profit downgrade due to timing issues with its school messaging software business. Not a good Xmas present for shareholders. Whilst it may well be only timing the company still seems to be struggling to gain traction.
  • Atlas Iron (AGO) +5.88% after signing a new debt restructure. Lenders have had no choice but to restructure the debt but it is not looking good.
  • Nine Entertainment Co (NEC) +2.52% and WIN Corp have begun exploratory merger discussions as they continue high stakes negotiations over their affiliation agreement.

Economic News

  • The government cut its price forecast for iron ore by 19% on continuing demand weakness and over supply. And here’s why. Exports of Australian iron ore will probably expand a further 13% next year after rising about 7% this year, according to the department.

In Asia

  • Indian PM Modi has shaken hands with the devil and approved the biggest deal with Russia since 2001. They are buying their own air defence missile defence system for around US$4.5bn.
  • Looks like China is stabilising and the government looks set to do more in 2016 to stimulate the economy.

Ahead in Europe

  • FTSE  +55 points.
  • DAX -62  points.
  • CAC +1.50 points.

And finally a classic line from Woody Allen for Xmas. When he asked his wife what she wanted for Xmas, she said a divorce. Woody replied that he wasn’t looking at spending that much money.

Happy Christmas and looking forward to another year of bringing you the best financial newsletter around.

Watch Henry Jennings on Sky Business Lunch Money today.


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