ASX 200 fell a modest 34 points at 5103 as buyers emerged from the shadows and gold fell away with Asian and US futures markets rallying on optimism of stimulus measures. Japan up 0.3% and China modestly lower down 0.2%. AUD at 73.85 and US Futures up 141 points.
A good fight back today again after early losses were turned around. We hit 5051 before the bounce with banks again the swing factor in nervous trade. Better US futures and a turn in the GBP also helped sentiment with FTSE 100 futures up around 1.2% suggesting that there may be some stability and bargain hunting in London. Cameron heads to his last love in with Euro leaders, so that will give some guide perhaps as to how negotiations will progress from here. The biggest problem is no one seems to have a plan. An exit strategy would have been a good idea from this advocating the leave vote. Even Baldrick is struggling to come up with a cunning plan.
Across the board losses with golds also under the kosh but banks holding up and Macquarie Group (MQG) turning around from down 3% to close up 1.36%.
Stocks and Sector Highlights:
- Energy shares were the worst hit today with Santos (STO)-2.58% and Origin Energy (ORG)-2.5% taking the brunt of the selling.
- Infrastructures stocks also took a hit with UK tourism perhaps not going to be as strong as previously thought. Sydney Airport (SYD) -3.98%, Qantas (QAN)-4.4% and Virgin Australia (VAH)-6.67%. European road exposure through Macquarie Atlas Roads (MQA) -2.77% also sold off.
- Banks turned from villains to heroes as the safe haven status and yield attracted buyers back in. Once again they have bounced off the $146/147 (for the big four basket) level to close up at ??
- Fundies and UK exposure again unpopular with Henderson Group (HGG) -1.33%, BT Investment Management (BTT)-1.66% and Clydesdale Bank (CYB) -0.72% all still suffering from currency and business question marks although well off their bottoms.
- Miners though gave up gains from yesterday with Fortescue Metals (FMG)-3.68% and Oz Minerals (OZL) -2.9% in the seller’s sights.
- Telcos and other defensives eased today led by Telstra (TLS)-1.1% and Coca Cola Amatil (CCL)-3.37%.
- Speculative stock of the day: New Talisman (NTL)-50% following a binding agreement with Newcrest (NCM) +2.65% over the Rahu project in NZ.
- National Storage (NSR) has announced an acquisition of the Southern Cross portfolio of 26 storage assets with 13,000 storage units of a price of $285m. The purchase will be funded by an equity raising with a $101m placement and a $159m 3 for 10 pro rata accelerated non-renounceable entitlement offer at a 158 cents.
- Evolution Mining (EVN)+3.94% after announcing record results across the board. Production of at least 800,000 ounces of gold each year for the next three years and a gradual reduction of its all-in sustaining costs (AISC) over the period to as low as $910 an ounce. They also aim to double the dividend rate to 4% of revenue,
- Mayne Pharma (MYX) in a trading halt as they bed down a $888m capital raising to buy Teva Pharmaceutical’s generic business in the US as part of their asset sell down. The company is offering investors a 1 for 1.725 ANREO issue at 128 cents to raise $601m and a $287m placement. transformational deal – Mayne Pharma’s eighth acquisition in four years and will push annual sales from around $260 million this year to around $580 million and increase its market value from $1.2 billion to more than $2 billion.
- Orocobre (ORE) +6.96% solid move today on a broker upgrade.
- Pilbara Minerals (PLS) +5.77% has announced a JV with Lithium Australia (LIT)+% to advance the technology called Sileach a process to recover lithium from spodumeme.
- Murray Goulburn (MGC) -2.64% has cut the price it pays to farmers to $4.80 in FY17. After applying the milk support supply package, the price they will receive falls to $4.31. The farmers consider that it costs them around $5.00 to break even.
- Crown Resorts (CWN) +0.5% have been given the tick of approval by the NSW planning assessment Commission with a number of changes but
- Barclays is the first big bank to switch its call from on hold to a cut in the August board meeting. They were one of only five forecasters surveyed by Bloomberg before the UK referendum last week which expected the RBA to remain on hold, at 1.75%, at the August 2 policy meeting.
- South Korea announced a 20 trillion won fiscal stimulus plan. The package will include an extra budget of about 10 trillion won that mainly will be used to create jobs and support regional economies. The Nikkei newspaper also reported that a 20 trillion yen ($196 billion) package has been proposed in Japan.
- Japan’s 10- and 20-year bond yields fell to fresh records of negative 0.22% t and 0.045%, respectively. More than 80% of the nation’s sovereign notes have yields below zero
Europe and US
- Current UK PM David Cameron is heading to his final love in with European leaders with a two-day conference taking on far more significance that ever. Top question will be why he called a referendum in the first place?
- Tonight the fallout continues as Labour leader Jeremy Corbyn will find it hard to survive with 47 resignations from his shadow cabinet. Seems Boris is not going to have it his own way.
- The focus has been on the FTSE100 but the less internationally exposed FTSE 250 has fared far worse down around 13% in two days. FTSE 100 only down 5.6%.
- Italy is preparing a €40 billion ($60 billion) rescue of its financial system as bank shares have collapsed on the Italian markets down around 30% since the vote result last week. Non-performing loans have ratcheted up to 18% of total balance sheets
A woman gets on a bus with her baby. The bus driver says: ”Ugh, that’s the ugliest baby I’ve ever seen!” The woman walks to the rear of the bus and sits down, fuming. She says to a man next to her: ”The driver just insulted me!” The man says: ”You go up there and tell him off. Go on, I’ll hold your monkey for you.”
The self preservation society
Brexit Vote-You’re only supposed to blow the bloody doors off.
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