ASX 200 up 0.9 points to 4880.9 as the rally withers on the vine. Banks flip-flop and Asian markets slide with China down 3.56% and Japan weaker by 0.6%. US futures down 70 points. AUD 71.40

The ASX 200 shrugged off the negativity of the G20 finance meeting and Slater & Gordon results to power ahead at one stage to hit 4925 before some Asian inspired weakness infused the market and we calmly gave back most of the gains to finish virtually unchanged at 4880 or 0.9 points to the good. Banks were once again the swing factor as positive turned to negative for all but Westpac (WBC) +0.67%. It has been a long three weeks of company reports and analysts are just coming up for air. Now the briefings start in earnest and companies will be doing the rounds pressing the flesh and trying hard not to give away information from persistent questioning. It is a ritual after every reporting season and ‘off the cuff’ and ‘off the record’ comments will drive thinking for the next few weeks.

ASX 200 Index Today                                    Aussie Dollar Today 

     

STOCKS AND SECTORS

  • Banks and financials were mildly weaker but they started the day in the right frame of mind. Good gains across the board though evaporated as the day wore on. Only Westpac (WBC) +0.67% could keep its head above water. Insurance Group Australia (IAG) -4.96% was ex-dividend today but further weakness knocked it down again. Wealth managers were slightly better as Macquarie Group (MQG) +0.53% and Magellan Financial (MFG) +1.06% did well but Challenger Financial (CGF) -2.08% eased back.
  • Resources were mainly positive although BHP -0.13% struggled slightly. Fortescue Metals (FMG) +1.49% and RIO +0.7% all to the good as were base metal stocks South32 (S32) +3.31%, Iluka Resources (ILU) +3.38% and Independence Group (IGO) +1.99%. Gold stocks eased back with Evolution Mining (EVN)-2.78% and Newcrest (NCM)-1.41%
  • Energy stocks were mixed led by Woodside (WPL) -2.35% but others fared much better. Santos (STO) +2.8%,Origin Energy (ORG) +2.78% and Oil Search (OSH) +0.6%
  • In industrials IT was a feature Iress (IRE) +5.09%, MYOB (MYO) +4.5% and Link Admin (LNK) +2.42%. In telcos, Vocus (VOC) +11.56% put in a stellar day although Telstra (TLS) -0.38% failed to fire.
  • The great Wesfarmers (WES) -3.07% to Woolworths (WOW) +2.51% switch continues as traders hope for better days ahead at Woolies and were reminded with WES that they do have resource exposure rather than just Coles and Bunnings. Wesfarmers was also ex-dividend today.
  • Clean and green stocks continue to slip away as traders take profits and deploy the cash elsewhere. Bellamy’s (BAL) -5.95%, Select Harvest (SHV)-7.76%, Freedom Foods (FNP)-6% and Warrnambool Cheese (WCB) -5.46%.
  • Speculative stock of the day: Consolidated Tin Mines (CSD) +34.78% after securing a US$20m funding facility.

CORPORATE NEWS

  • Slater & Gordon (SGH) -30.12% announced a loss of nearly $1bn today after a non cash impairment of $812m from the UK business.
  • Qantas (QAN) -0.26% has had its ratings upgraded by Moody’s to investment grade or Baa3 with a stable rating. There are only three airlines in the world with investment grade ratings.
  • Cash Converters International (CCV) +7.22% will pull back significantly in the United Kingdom and wind down its car leasing arm, Carboodle, as it tries to focus on highest-returning activities. The company also reported a return to profit, which was helped by a boom in the number of Australians taking out payday loans online. After a strategic review of its businesses,CCV said it will sell its UK corporate stores and a £8.7 million ($16.9 million) personal loan book, while lifting investment in Australia.
  • Boart Longyear (BLY) +37.31% has appointed a new chief executive, as it reported a $US326.3m loss for 2015, hurt by lower prices and unfavourable currency movements. The company had reported a $US332.7m loss in 2014. Revenue slid 15.2% to $735.2m and the EBITDA loss widened to $115.3m from $82.6m. It will not pay an interim dividend.
  • McAleese (MCS) shares were suspended from trading today as it deferred its interim results and is talking to lenders on recapitalising the business and debt levels.
  • Murray Goulburn (MGC)-10.48% as 34% was wiped off its profits due to subdued global dairy prices. Net profit fell to $10m from $15.2m but the company is confident that moving towards higher margin value added products is the way to go. It expects to maintain a farm gate price of $5.60 per kilogram of milk solids. This would generate full year net profit of $63m, under the co-operative profit sharing mechanism between farmers and investors in its non-voting listed trust. Murray Goulburn will pay an interim dividend of 3.5 cents a share, fully franked.
  • Recall Holdings (REC) +0.73% announced a 49% fall in net profits as the cost of the takeover from Iron Mountain weighed on the bottom line. $US$16.2m of costs associated with the takeover were included as sales fell 7% to US$397.6m from $427 a year earlier.

ECONOMIC NEWS

  • Company gross operating profits fell 2.8% in the December quarter, missing market expectations of a 1.8% fall. They were down 2.3% in the 12 months to December. The estimate of income from sales by manufacturers fell 2%, in seasonally adjusted chain volume measures, and for wholesalers it was up 1.6%, in the December quarter compared with the previous three months.

Weak wages at around 2.2% growth will not be enough to spur the RBA into cutting rates tomorrow. Company investment spending also heading down as we transition from mining to wining and dining.

ASIAN MARKETS

  • Disappointment in Chinese markets that the G20 meeting could bring no coordinated stimulus package so every man for himself.
  • China is due to report its first gauge of economic strength for February on Tuesday with the PMI release. The measure probably remained unchanged at 49.4 from a month earlier, according to the median estimate in a Bloomberg survey. Readings below 50 indicate contraction.
  • News out that China is trying to halt overseas investment schemes in an attempt to stem capital outflows. Two pioneering outbound schemes have been mothballed, being the Qualified Domestic Limited Partner Scheme allowing foreign fund managers to sell overseas investments to Chinese clients.

AHEAD IN EUROPE

  • FTSE  -16 points.
  • DAX  -51 points.
  • CAC -26 points.

MARKET STATS

  • Volume was $6.230bn (Daily average $4.656bn FYTD)
  • Dow Jones Futures down 69 point.
  • Dow Jones was down 57 points on Friday.

Clarence

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NT Markets

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