ASX 200 suffered its biggest loss this year as the ASX 200 fell 90 points to 5684.5 in a major test for the bulls. Broad based losses accelerated in banks and resource stocks with gold miners and REITs the only shining light. Asian markets suffered too with Japan down 2% and China down 0.7%. AUD at 76.57c and US futures down 47 points. Iron ore below US$90 in Asian trade.
STOCKS AND SECTORS
- Miners giving back some recent gains as the risk off trade bites. BHP -2.92%, RIO -2.60% and Fortescue Metals (FMG) -5.29%. Base metal stocks too in the sellers’ sights with South32 (S32) -2.57% and Iluka Resources (ILU) -2.41%. BlueScope Steel (BSL) -4.69% one of the biggest losers today.
- Gold miners the only place to hide today with Newcrest (NCM) +1.72% despite an ex-dividend and St Barbara (SBM) +2.76%. Evolution Mining (EVN) +0.46%
- Energy stocks, no good news here unfortunately as Santos (STO) -2.70%, Woodside (WPL) -1.76% and even Cooper Energy (COE) -4.94%. Coal stocks too unwound with Whitehaven Coal (WHC) -4.23% and No Hope Corp (NHC) -4.30%
- Industrials soggy too. Some deep losses in construction stocks hoping for a Trump inspired infrastructure boom. Boral (BLD) -% and James Hardie (JHX) -2.26%. Consumer stocks fell hard Mantra (MTR) -3.36%, Flight Centre (FLT) -1.73% and Harvey Norman (HVN) -2.22% giving up the bounce.
- Banks and financials suffered heavy losses today with the Big Bank Basket back at $178.67 Westpac Bank (WBC) -2.42% the worst performer with insurers also copping a beating. QBE Insurance (QBE) -2.86% and NIB Holdings (NHF) -3.65%. Must be a bond yield thing. No Trump spending rates climb but not at the same rate.
- REITs one of the few bright spots of green today in a sea of red. Falling bond yields helping sentiment with Goodman Group (GMG) +1.47% and GPT+1.01%.
- Healthcare could not escape the selling pressure despite defensive qualities. CSL -1.98%, Ramsay Health Care (RHC) -0.16% and Fisher and Paykel (FPH) -1.24% after a former employee pleaded guilty to fraud charges
- IT and telcos back in the dog house as Telstra (TLS) -1.30% slid and TPG Telecom (TPM) -2.72% couldn’t turn the more positive sentiment into sustained gains. IT stocks slipped away again as Aconex (ACX) -3.5%, Computershare (CPU) -2.74% and Technology One (TNE) -2.00%
- Speculative stock of the day: We wrote up Updater (UPD) +12.90% this morning and it was good to see more buyers jump on board the story. One broker has a significantly higher valuation following the apparent success of the pilot project in the US. In spec stock land Property Connect (PCH) +55.56% attracted the punters after announcing the LiveOffer platform is now live. This is a SaaS business focussed on the US optimising the rental property application process.
- Nufarm (NUF) +3.20% Revenue for the six months to January 31 rose to $1.36bn, with the bottom line improving from a $91m loss. Nufarm said revenue was up in all its regional crop protection businesses except Europe, and that it is on track for full-year earnings growth if normal seasonal conditions prevail in major cropping regions.” The dividend was lifted 25% to 5c.
- TFS Corp (TFC)7.42 -% has been on the receiving end of a 40-page report calling the WA Sandalwood producer a ‘Ponzi Scheme’. A US hedge fund Glaucus Capitalclaims TFS has materially misled investors about future cash flows by making unrealistic assumptions about the yield from its trees and the future price of sandalwood. ASX short sell data reveals that 12% of the stock in TFS has been short sold.
- Staying with Agricultural themes, the Fonterra Share Fund (FNP) -0.18% has posted a modest 2% rise in first half net profit and has held its price paid for milk to farmers at $NZ6 per kg of milk solids. Revenue rose 5% to $NZ9.2bn. Fonterra declared an interim dividend of NZ20c.
The Westpac – Melbourne Institute Leading Index has fallen to 1.02% in February from 1.34% in January.
The Leading Index growth rate has lifted over the last six months from 0.22% in August to the current 1.02%. The main components driving the improvement have been: commodity prices, in AUD terms (+0.74ppts); the yield spread (+0.46ppts); and a reduced drag from hours worked (+0.17ppts).
- Iron ore on the Dalian Commodity Exchange slipped 4.9% to 586 yuan($US85.13) per tonne. The most-active rebar on the Shanghai Futures Exchange was down 3.8%at 3147 yuan a tonne by midday.
- Japan’s exports grew 11.3%year-on-year in February, led by shipments of car parts and electronics parts to Asia. That took the seasonally-adjusted trade surplus to 680bn yen ($8 billion, the highest since April 2010, Ministry of Finance data on showed.
EUROPE AND US
- Goldman Sachs and Morgan Stanley have said they are preparing to shift staff and operations out of London as the Article 50 trigger becomes reality. Goldman Sachs will initially relocate hundreds of London-based employees to expand other offices after the split. Morgan Stanley President Colm Kelleher said “It’s not going to be the end of London, but clearly we will have to adjust.”
- In a Bank of America Merrill Lynch monthly survey of 200 global investors representing close to $US600 billion in assets under management, a net 34% of managers said equities are overvalued, the highest reading in the 17 years.
- PIMCO is turning bullish on world growth. It has raised its growth forecast to between 2.75 and 3.25% (a rise of 0.25% on both the lower and upper estimates from December).
- The GBP3bn gold mining merger talks between Acacia Mining and Canada’s Endeavour Mining have been stopped, weeks after the Tanzanian government slapped Acacia with an export ban on its copper and gold concentrate.
Marrying a man for his good looks is like buying a house for its paint.