ASX 200 pushes up 44.1 points to 4975.6 as banks bounce and resources continue their rally. Volume was scarce. Chinese exposed health and dairy stocks has a nasty day although off the lows on bargain hunting. Asian markets mixed as Japan up 1.26% and China down 0.49%. AUD 76.17, US futures up 17.
A solid day at the coal face today as the resource sector kicked us higher and banks finally found some mojo adding 25 out of the 44 points to the index. After a tentative start the market ground higher closing on near its highs of 4977.
Business confidence numbers were partly responsible but the lack of citizens marching towards the castle with pitchforks also helped sentiment. It seemed that for once bank bashing was not the plat du jour. We had another sector to fall out of love with today, as the ‘clean and green’ bubble stocks in vitamins and baby infant formula stocks came under the spotlight following news that China is imposing tariffs on imports and clamping down on grey market importation channels. In a sea of green, the whole sector was red. Early losses though were seen as a chance to pick up some quality stocks at bargain basement prices. Blackmores (BKL) -6.76% was the biggest loser early with a fall to 14400 cents before a solid rally from the lows. The companies themselves are playing down the moves from China but there is no doubt it will have some effect on sales especially for those late to the party without sufficient brand presence to weather the storm. Meanwhile in Chinese milk stocks that are listed here go from strength to strength with new entrant China Dairy Corp (CDC) +18.57% showing a clean set of hooves after listing at 20 cents last week.
ASX 200 Index & Aussie dollar charts – Today
Stocks and Sectors
- Resources once again the place to be as iron ore, gold and oil all better overnight. BHP +2.11%, RIO +2.37% and the mighty Fortescue Metals (FMG) +3.86% well off the top after two very strong days. Production numbers tomorrow from the company so understandable to trim the sails a little. Short positions are now down 63% since April 2015.
- Energy stocks not really firing today despite the oil price back above $40. Unfortunately, the gas price is not following the same course and so weighs on the sector rather heavily given the exposure is more to gas prices than crude. Oil Search (OSH) -1.06%,Woodside (WPL) +0.08% and Santos (STO) -0.51%
- Gold stocks were mixed as the higher AUD took its toll on the bullion price in local terms. St Barbara (SBM)-4.88%,Gold Road (GOR)-1.92% and Northern Star (NST) -2.89% together with the gorilla in the midst Newcrest (NCM)-1.99% whilst Regis Resources (RRL)+3.7% and Beadell Resources (BDR)+7.69%.
- Financials and Banks finally turned green. The big four index is currently around $148.50 to buy all the big ones. This is very close to its recent lows back in February of around $147 and a long way down from the highs of around $215 a year ago. Strange how sentiment has changed given the economy is pretty much in the same spot as it was then. Australia and New Zealand Bank (ANZ) +2.65% and National Bank (NAB) +2.53% the big performers. REITS doing well again on better sentiment. Westfield Corp (WFD) +0.81% and Vicinity Centres (VCX) +1.27% the drivers. Macquarie Group (MQG) +1.81% and BT Investment (BTT) +1.81% the standouts in wealth managers.
- Industrials were mixed Wesfarmers (WES) -1.22% are now having their own problems having watched with amusement as Woolworths (WOW) -0.38% squirmed. Telstra (TLS) +0.19% has become becalmed in a sea of negativity as growth is hard to find. Other telcos seem to be similarly afflicted with Amaysim (AYS) -3.99%, Hutchison (HTA) -1.28% and Spark NZ (SPK) -0.95%
- Clean and Green sector today was more down and dirty. BWX -11.07%, Blackmores (BKL) -6.76%, Bellamy’s (BAL) -%10.75 and A2Milk (A2M) -6.45% led the falls but the rout in Tassal (TGR)-1.92% continues after pulling out of the Coles contract due to warmer water and a switch of supply channels. Select Harvest (SHV) -2.19% have already had a year to forget and Huon Agriculture (HUO) +2.85% though better. Today Freedom Foods (FNP) -4.23% replied to the media speculation on dairy sales in China and saw no change to their business.
- Tech entrant Wisetech (WTC) -1.29% took a breather today after a solid 16% rise on debut yesterday. Looking at other tech players Codan (CDA) -12.43%,Netcomm Wireless (NTC) -6.55% and Urbanise (UBN) -6.58%
- Speculative stock of the day: Maximus Resources (MXR) +75% as it advances its lithium potential in WA. Now you only have to mention lithium in a press release and you get a kick. It used to be graphite but that is so baby infant formula.
- Alumina (AWC) +4.49% following a big fall yesterday before the numbers last night in the US from Alcoa. adjusted first-quarter earnings of 7 cents per share on $4.95 billion in revenue. Earnings fell from 28 cents per share in the prior-year period, while sales slid from $5.82 billion. Alcoa expects 2016 aerospace sales growth of 6 to 8 percent, down from the 8 to 9 percent estimated in the fourth quarter. It projects auto production growth of 1 to 4 %t. Analysts expected Alcoa to post earnings of 2 cents per share on $5.14 billion in revenue. The company also announced that it could cut as many as 2,000 jobs.
- Newcrest (NCM) -1.99% after mine production resumed at Toguraci part of the Gosowong project in Indonesia.
- Telstra (TLS) +0.19% has appointed former AMP chief Craig Dunn to the board as a non-executive director.
- Arrium (ARI) The administrator of collapsed steel group Arrium, insolvency and accounting firm Grant Thornton, is set to be forced out of the position at a court hearing in Melbourne.
- Superstar Lithium stock Orocobre (ORE) +0.95% after revealing that its Olaroz production is on target for 2016.Production for the quarter was 2,322 tonnes of lithium carbonate in line with previous guidance. The stock was up over 9% early.
- Queensland Nickel’s Clive Palmer will be referred to ASIC following its collapse into liquidation. QN went into liquidation owing $100m including staff entitlements.
- NAB said on Tuesday that its main business conditions index jumped four points in March, to 12, putting it level to its highest point since Australia’s commodities-led bounce-back from the GFC.
- Business confidence also improved, up three points to around a long-term average of six.
- Nomura Holdings plans to shut down its European equity operations as it cuts costs after years of failing to become profitable overseas.
- Japan’s 30-year bonds gained, pushing their yield to an all-time low of 0.39%. The 10-year yield declined by half a basis point to negative 0.095%. Japan’s government bond market is the second biggest in the world and about 70% of its securities have sub-zero yields following the Bank of Japan’s adoption of a negative interest-rate policy this year.
- Goldman Sachs will pay US$5.1 billion to resolve U.S. allegations that it failed to properly vet mortgage-backed securities before selling them to investors as high-quality debt. New York-based Goldman Sachs, which announced details of the accord in January, will pay a US$2.39 billion civil penalty, make US$875 million in cash payments and provide US$1.8 billion in consumer relief.
- Plans to force the largest companies to disclose more about their tax affairs will be unveiled by the European Union on Tuesday.
- Britain’s EU Commissioner, Lord Hill, is set to present the rules, which will affect multinational firms with more than €750m (£600m) in sales. They will have to detail how much tax they pay and in which EU countries.
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