ASX 200 closes up 19.1 points at 5185.5 after a very solid start ran out of steam hitting 5214 early. Banks gave back early gains but Telstra breathed a sigh of relief as its Asian expansion plans unwound. Japan and China both showing good strength up 1.6% and 2.7% respectively. US Futures down 7. Aussie dollar knocking on 76 cents, still at 75.85.
Good leads and a rerating of Telstra helped the opening optimism. We peaked around 11 am with 5214 notched up on the scoreboard. A holiday in Melbourne coupled with waning enthusiasm for banks took its toll and we eased back throughout the session despite some very positive Asian market advances.
The chart shows the ASX 200 and the 50 and 100 day moving average. Losing some momentum.
Fed two day meeting starting Tuesday is still the focus.
Stocks and Sectors
- Resources were mixed today with BHP+0.74% whilst RIO -0.22% and Fortescue Metals (FMG)-2.54% eased off. Seems the oil exposure is helping BHP. Coal is also stirring though Whitehaven Coal (WHC)+0.68% and New Hope (NHC) unchanged after profit taking. South 32 (S32) +1.54% continued their rise as did Iluka Resources (ILU)+1.19% and the base metal stock Independence Group (IGO)+9.49% had a very positive day following a Euroz presentation.
- Gold stocks eased but St Barbara (SBM)+8.62% was the exception as it is set to join the S&P 200 indices.
- Energy stocks responded well to the higher oil price and word from the IEA that the bottom was set and no more need to panic. Origin Energy (ORG)+2.56% benefited from a UBS report on a possible break up and /or IPO of its LNG project stake.
- Banks were firm but off their highs. REITS underperformed for a change and wealth managers did well. National Bank (NAB)+1.4%, Australia and New Zealand Bank (ANZ)+1.3% and Macquarie Group (MQG) +2.84% the stand outs.
- The big industrial gorilla stirred today with Telstra (TLS)+2.33% following news that they had been unable to come to terms with San Miguel on terms for their new mobile business in the Philippines. The market was always wary of this expansion and rewarded Andy Penn for walking away as the terms did not suit.
- Healthcare stocks better as were transport stocks like Qantas (QAN)+2.78%, Aurizon Holdings (AZJ)+1.99% and Macquarie Atlas Road (MQA)+1.07%.
- Speculative stock of the Day: Strata-X (SXA)+34.6% after announcing austerity measures whilst still waiting for opportunities.
- The Bank of Queensland (BOQ)+1.54% is facing a multi-million-dollar law suit for allegedly failing to protect its mum and dad customers from an accused fraudster. More than 350 people with BoQ Money Market Deposit Accounts lost more than $60 million, according to law firm Quinn Emanuel Urquhart and Sullivan.
- Flight Centre (FLT)+2.33% announced today that it had bought a Ditch corporate travel agency business for an undisclosed sum. The Dutch business expands their global reach but its revenue was only around EUR10m so not significant in eth scheme of things but a foothold none the less
- Telstra (TLS)+2.33% the big news of the day following their withdrawal from plans to buy into a third mobile network for $1.5bn in a JV with San Miguel in the Philippines.
- Credit card spending remained subdued in January. The Reserve Bank this morning released monthly data showing the value of credit card purchases was $21.9 billion in January, a 2.8 % increase compared with a year earlier. The numbers also showed that outstanding credit card balances are gradually falling, a trend that banks say has made cards less lucrative.
- The total value of all credit card debt dipped to $50.9 billion, down from $52 billion a month earlier. The average card balance slipped to $3,114.30, down from $3,120.40 in the previous month.
- The offshore yuan declined the most in two weeks after China’s central bank governor said major measures weren’t needed to boost growth even as data released over the weekend pointed to a slowing economy.
- The currency has returned to a more “normal, rational and fundamentals-driven” trend, Zhou Xiaochuan told reporters over the weekend.
- Seems the good clear communication and confident attitude is working with the Chinese market powering ahead today, up 2.65%.