ASX 200 finishes up 107 points at 5337 as all sectors rally with banks leading the charge on election and US jobs numbers. Asian markets were positive with Japan up 3.98% and China up 1.01%. AUD steady at 75.63 and US futures up 82 as records may fall tonight.

Across the board rally with all sectors leaping at the open and pushing to a high of 5337 at the close. The move came as the election issue was resolved and the US and other international markets have shrugged off Brexit fears and are now close to all-time highs at least in the S&P500.

The ASX 200 is now up 41 points for the year.

STOCKS AND SECTORS

  • Banks the stand out performers with gains of between 2%-3% as once again the banking index has bounced off the big four basket level of $147 back to $152.
  • REITS doing well again with Scentre Group (SCG) +2.74% and Vicinity Centres (VCX) +2.34% the leaders.
  • Energy stocks were underwhelming, Oil Search (OSH) -0.72% although Whitehaven Coal (WHC) +7.75% continues to move significantly higher now almost triple its low level touched back in February.
  • Base metal stocks had a good day with Oz Minerals (OZL) +5.38%, Western Areas (WSA) +5.65% and Iluka Resources (ILU) +10.84% the brightest stars.
  • Gold miners continued to move higher again with Newcrest (NCM) +1.95%, St Barbara (SBM) +3.94% and Perseus Mining (PRU) +5.43% following an investor presentation.
  • Industrials underperformed slightly with defensive shares like Telstra (TLS) +1.43% and Transurban (TCL) +0.83% missing out on the risk on rally. Healthcare stocks firm led by CSL +1.38% and Ansell (ANN) +2.28% after early losses from Primary Healthcare (PRY)-2.36%
  • Speculative stock of the day: Tawan Resources (TAW) +93.55% acquisition of a lithium property, Mt Belches, in the goldfields region of WA. Five tenements were acquired including Cowan around 159 square km and Yallari another 100 square km for the issue of 40m shares in Tawan Resources.

CORPORATE NEWS

  • Sirtex (SRX) +6.49% after announcing worldwide sales growth of 16.4% with the US market the stand out performer with 19.2% growth for the SIR-Spheres Y -Resin microspheres.
  • Primary Healthcare (PRY) -2.36% the company now expects to book underlying profit after tax of $104 million for the year ended June 30. Previously, Primary had forecast it would meet the bottom end of its forecast range of $110 million to $115 million. It expected to book about $98m in after-tax, non-cash write-offs to reflect the carrying values of a number of balance sheet items, including its IT systems, centre closures and property.
  • Independence Group (IGO) +6.08% reported provisional production estimates of 28,651 ounces of gold, from Tropicana, Jaguar produced copper and zinc ahead of guidance at 505,578 throughput rate with recoveries 84.5% for copper and 91.7% for zinc.
  • Metals Ex (MLX) -2.17% after clarifying its position on the Rover project, hosing down sale speculation and saying although not a priority it is by no means unwanted and remains a material copper gold project.
  • Billabong (BBG) -2.65% has settled its class action over the timing of earnings downgrades paying $45m to clients of Slater and Gordon. The settlement still needs to be approved by the Federal Court. The final sum had already been paid and provided for in previous financial reports.

ECONOMIC NEWS

  • Housing finance rose in May as loans to investors picked up 3.9%, their biggest monthly gain in a year, according to the ABS. Investment finance picked up to $11.7bn in May from $11.3bn in April, the first increase in three months. Loans to owner occupiers rose 0.4% to $13.5 bn. The total monthly new lending figure of $32.3bn was 1% higher than April’s $32bn.

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  • Moody’s has joined S&P ratings agency saying that ‘in particular, indications that under a Coalition government with a split Senate, little agreement can be reached on fiscal consolidation and macroeconomic policy measures would be credit negative.’
  • Record volume of iron ore were shipped through Port Hedland in June. After a slow start to 2016, 41.8 million tonnes were shipped through the port in the thirty days of June. The previous record was set in March, when 39.53 million tonnes were shipped.

 

IN ASIA

In China

  • Chinese PPI fell 2.6%in June, compared with a 2.8% drop a month earlier, the National Bureau of Statistics said Sunday. The decline was the smallest since late 2014. The consumer-price index rose 1.9% from a year earlier, compared with a median economist estimate of 1.8% and a 2 % gain in May.
  • Russia is holding up China’s plan to build a hydroelectric dam in Mongolia with a $1bn loan package. The Russians are concerned on water rights form the proposed Egiin Gol Hydro Power Plant in northern Mongolia.
  • Just to complicate the matter further China has conducted naval drills in eth South China Sea on the eve of a UN ruling on territorial waters.
  • The three-month Shanghai Interbank Offered Rate fell 1bps to a seven-week low of 2.93% on Monday, as the central bank withdrew a net 645 billion yuan (US$96 billion) last week,

In Japan

  • Prime Minister Shinzo Abe’s ruling coalition won an election, a show of support for his stimulus policies. Seems that Abe will push ahead with stimulus plan and some expect tomorrow to see more revealed.
  • Pokémon owner Nintendo has soared in the last few days on the release of the augmented reality app Pokémon Go. The game, which lets players track down virtual monsters in their vicinity, has topped the free-to-download app charts for Apple in the U.S. and Australia since its release on July 7.

EUROPE AND THE US

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  • US analysts have cut big bank profits ahead of the reporting season.
  • Economists believe the UK Monetary Policy Committee (MPC) will cut rates to a new low of just 0.25% on Thursday, while markets have priced in a 75% chance of more easing.

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  • The Meerkats owner comparethemarket.com.au are lining up an IPO with a GBP2bn valuation. BGL, the company behind the ads is owned by South African insurance conglomerate BHL and is comparing the market with plans to list later this year.

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And finally…………….
– I was explaining to my wife last night that when you die you get reincarnated but must come back as a different creature. She said she would like to come back as a cow. I said, “You obviously haven’t been listening.”

Clarence

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