The ASX 200 closed up 47 points at 7097 (+0.7%), well off its highs as some caution crept in. No bad news from Ukraine was good news for the market with one eye on the RBA, which once again stressed ‘patience’ is required. Banks were solid as the Big Bank Basket rose $173.33 (+1.3%) with CBA the standout, MQG rose 1.3% and insurers had a day to rally despite QLD and NSW floods. SUN up 1.2% and SDF up 0.7%. Industrials firmed with travel stocks in focus, QAN up 1.8%, FLT up 3.3% and WEB rising 4.0%. Tech was the big gainer today as the sector bounced hard and fast. SQ2 was a big winner up 12.8% as Block rallied in the US. The AllTech Index rallied another 4.5% with XRO up 7.03% and WTC better by 4.7%. Even ‘old skool’ tech rallied, REA up 3.5% and SEK finding friends up 6.2%. Healthcare dominated by a rise in CSL up 0.4% and COH up 1.7%. Miners were mixed, base metal stocks were in demand, IGO rallied 6.7% on a Glencore deal being off so no cap raise, lithium better, PLS up 3.3% AKE up 7.0% and SYA up strongly 11.1% on a resource upgrade. Iron ore miners flat and golds down led by NCM down 1.3% and NST off 2.8%. Energy stocks better, WPL up 0.5% and KAR rising 3.9%. Uranium stocks also doing well as Europe looks to new energy sources rather than oil and gas from Putin. In company news, Z1P returned post its capital raise down 6.3%, though still trading at a premium to target SZL up 9.8%. KLL fell 21.0 % on an operational update as more funding may be required, CBA sold its Chinese banking investment, ANZ saw some management changes and ALQ rose 4.7% on new guidance. Asian market slightly firmer and 10-year yields 2.18%.

End of Day Podcast – Tuesday, March 1 

Major Movers:

  • Winners: PBH, YAL, BOE, PDN, SQ2, IMU, SYA, TYR
  • Losers: SFR, PRU, Z1P, OMH, RMS, ING, MGH
  • Positive sectors: Banks. Base metals. Industrials. Tech. Uranium
  • Negative sectors: Iron ore miners. Gold
  • High 7160 Low 7060. Closes off highs
  • RBA stresses ‘patience’
  • Big Bank Basket: Rises to $173.33 (+1.3%)
  • All-Tech index: Up 4.5%
  • Gold: Falls to $2624
  • Bitcoin: Pushing hard to US$43137
  • Aussie Dollar:  Rising to 72.58c
  • 10-Year Yield: Steady at 2.18%
  • Asian markets better with Japan up 0.7%, HK down 0.2% but China up 0.2%
  • US Futures: Dow down 16 Nasdaq down 9

Stocks on the Move

  • BOE +13.24% uranium focus on Ukraine issues.
  • SYA +11.11% doubles Quebec resource base.
  • PBH +17.46% good bounce but can it last?
  • BET +9.82% IT rallies.
  • TYR +10.75% bargain hunters.
  • AVH +25.68% quarterly results and transition period.
  • VMY +25.00% uranium bounce.
  • VR1 +12.90% half yearly reports.
  • PTX +19.35% investor presentation.
  • EMV +4.12% tech bounce helps.
  • SFR -11.64% downgrades.
  • CCX -3.32% continues lower.
  • BRU -27.45% drilling update.
  • KLL -21.00% operational and corporate activities update.
  • DUB -4.76% Shaw downgrades but still 100% above price.
  • TEK -3.03% results late yesterday.
  • VGL -6.27% delivers big screen result.
  • Speculative stock of the Day: Bulletin Resources (BNR) +29.17% decent volume and nice move higher but no news.

In the News

  • CapVest has lobbed a competing bid for Virtus Health (VRT). Yesterday BGH upgraded its takeover offer, but CapVest has improved on that gain with a 780c bid.
  • IGO (IGO) – has finished talks with Glencore regarding a potential acquisition of the CSA Copper Mine without a deal.
  • Insurance Australia Group (IAG) comments on flooding in southeast QLD and NSW, said it is too early to determine financial impact. “The number of claims is expected to rise further over the coming days, with the event still unfolding and as customers identify damage to their property.” IAG has a maximum event retention of $95m. The maximum event retention (MER) is the largest loss to which an insurer will be exposed due to a concentration of risk exposures.
  • ANZ executive Mark Hand to leave, Maile Carnegie to replace.
  • Viva Energy (VEA) announces hydrogen fuel station in Geelong.
  • CBA (CBA) offloads 10% stake in Bank of Hangzhou.
  • Z1P finalises $149m placement at 190c. SPP for $50m to come.
  • ALS (ALQ) – has increased its anticipated profit guidance for the year ending June 30 to between $260m- $265m. The increase marks a 6.5% higher profit forecast.
  • AUSTRAC will commence civil penalty proceedings in the Federal Court against Crown Melbourne and Crown Perth

Economic News/Bond Markets 

RBA keeps rates on hold as expected.

  • RBA notes the war in Ukraine is a major new source of uncertainty. Observed inflation had spiked around the world and expectations of future policy interest rates have increased.
  • Household and business balance sheets are in generally good shape.
  • Wages growth is still expected to be modest and it is likely to be some time yet before growth in labour costs is at a rate consistent with inflation being sustainably at target.
  • Underlying inflation is expected to pop then drop to 2.75% as the supply-side problems are resolved and consumption patterns normalise. Expects CPI inflation to jump on the back of higher fuel prices.
  • Will not increase the cash rate until actual inflation is sustainably within the 2 to 3% target range.
  • Prepared to be patient.
  • Australia’s current account surplus decreased by $9.3bn to $12.7bn in the December quarter. ABS said, “the decrease in surplus was driven by weaker exports of non-rural goods, while imports of intermediate goods rose.”
  • Home loans value in January rose 2.6% vs consensus of a 0.3% rise. Owner-occupier loans: +1%, investor loans: +6.1%.
  • CoreLogic Home Value Index rose 0.6% in February to be up 20.6% over the year. Sydney home prices fell 0.1% in February. Sydney prices fell 0.1% in the month, Melbourne flat and Brisbane the most improved adding 1.8%.

Asian Markets

  • The official Chinese manufacturing purchasing managers’ index rose to 50.2. The non-manufacturing gauge, which measures activity in the construction and services sectors, increased to 51.6, above the consensus forecast.
  • New orders picked up, while factory managers reported stronger expectations for business activity in coming months.
  • Hong Kong to lock down city for mass testing.
  • Toyota hit by cyberattack, Japanese plants shut down affecting 5% of output this month. That Land Cruiser wait just got longer.
  • Toshiba CEO resigns. Stock rallies.

US and European News

  • Ukraine facing another difficult day.
  • ICC to investigate Russia for possible war crimes.
  • Shell to exit its JV with Gazprom.
  • Neil Diamond sells music catalogue to Universal Music. Sweet, Caroline.

And finally….