ASX 200 bolts out of the gate this week with a solid 94-point gain to 5257 on optimism that Brexit will be another Y2K moment. Volume ok for a Monday as shorts squeezed. Banks and materials lead the way in broad based rally. Asian markets positive with Japan up 2.4% and China down 0.14%. AUD at 74.40 with US futures rebounding to be up 186 points.
The match out saw another 10-15 points on the index as shorts were squeezed.
A great way to start the week for the bulls as polls over the weekend from the UK suggest that the ‘Remain’ camp is firmly back in the lead. Risk seems to be fading for huge eruptions and volatility this week on the vote and the market zoomed ahead on the optimism. We still have 13 polls before the only meaningful one on Thursday. Volume wasn’t too bad and investors were happy to cover shorts after the rout last week and head in to the crucial vote slightly long. After Brexit we can start to focus on the local election with under two weeks to go.
Are we there yet?
Stocks and Sector Highlights:
- Financials were the focus with Commonwealth Bank (CBA) +3% the stand out as the sector accounted for nearly half of the gains on the ASX 200.
- Energy and materials also strong. BHP +4.4%, Woodside (WPL) +5.9 % whilst golds take a breath as risk unwinds on a Brexit vote. Perseus Mining (PRU) -6.6 % and Dacian Gold (DCN)-4.7 % with AUD bullion down to $1724 as the long gold trade turns a little sour.
- Speculative stock of the day: Platina Resources (PGM) +58.5 % +% after announcing a $2.3m placement to fund a feasibility study of its high grade Owendale Stadium platinum, cobalt and nickel project.
- IPO of the Day: Big start today for a new ETF FUEL which is tracks the performance of global energy companies and is hedged in AUD. No trades today though.
- Metcash (MTS)-12.5 % following results this morning. Reported profit after tax was $216.5 m, up from a $384.2 m loss last year, while underlying after tax profit was up by $4.7 m to $178.3 m. IGA network same-store sales grew 1.4 % last financial year. Earnings before interest and taxes fell 7.4 % to $274m
- Syrah Resources (SYR) -0.8 % completed its $194m in fresh capital from eth institutional placement at 605 cents to help fund its Balama graphite project in Mozambique.
- APN News (APNDA) + 1 % Demerger of NZ business has been approved by the Overseas Investment Office in NZ.
- Gold Road (GOR) -5.7 % approvals pathway set from EPA for the Gruyere project.
- ERM Power (EPW) -25.2 % after reaffirming FY16 guidance and FY17 outlook somewhat ‘challenging’.
- Resolute Mining (RSG)-2.5 % after repaying the outstanding balance on the company’s US$50m senior secured debt instrument.
- Graincorp (GNC)+0.9 % after announcing that the media reports were right and its biggest division used the wrong slides for its recent presentation.
- Austal (ASB)+1.7 % two orders won for new export orders in commercial space.
- Guvera IPO has been pulled after the ASX knocked it back.
Economic News-Nothing significant locally today
- Japan’s exports fell for an eighth consecutive month in May as shipments to China, the US and Europe slumped.
- Exports to the U.S. fell 10.7 % in May from a year earlier.
- Shipments to the EU declined 4 %.
- Exports to China, Japan’s largest trading partner, dropped 14.9 %.
- 24 % decline in the value of steel exports was the biggest drag on shipments.
- Japan Nationwide Department Store Sales (YoY) May: -5.1% (prev. -3.8%).
- In China, new-home prices gained in 60 cities in May versus 65 in April. The average new-home price rose 0.84 % in May from April, down from 1.03 % in the previous month
Europe and US
Bremain or Brexit? Three days left in the Battle for Britain. Odds are now 1/3 to ‘Remain’ and 9/4 to ‘Leave’.
- Brazil is planning a 20-year budget freeze.
- India’s central bank chief’s decision to leave at the end of his term is unsettling some with rupee heading for its biggest loss since January.
These are genuine (must be I found them on the net) comments from pilots to the maintenence engineers of airlines when they fill out the post flight checklist. Some are beauties!
P: Left inside main tyre almost needs replacement.
S: Left inside main tyre almost replaced.
P: Test flight OK, auto-land very rough.
S: Auto-land not installed on this aircraft.
P: Something loose in cockpit.
S: Something tightened in cockpit.
P: Dead bugs on windshield.
S: Live bugs on back order.
P: Auto pilot in altitude-hold mode produces a 200 feet per minute descent.
S: Can’t reproduce problem on the ground.
P: Evidence of leak on right main landing gear.
S: Evidence removed.
P: DME volume unbelievably loud.
S: DME volume set to more believable level.
P: Friction locks cause throttle levers to stick.
S: That’s what friction locks are for.
P: IFF inoperative in OFF mode.
S: IFF always inoperative in OFF mode.
P: Suspect crack in windshield.
S: Suspect you’re right.
P: Number 3 engine missing.
S: Engine found on right wing after brief search.
P: Aircraft handles funny.
S: Aircraft warned to straighten up, fly right and be serious.
P: Target radar hums.
S: Reprogrammed target radar with lyrics.
P: Mouse in cockpit.
S: Cat installed in cockpit.
P: Noise coming from under instrument panel. Sounds like a midget pounding on something with a hammer.
S: Took hammer away from midget.
Have a good one
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