Markets Live: ASX200 holds above 4600

4:37pm: The dollar held its ground against the greenback at $US1.0542, within easy reach of a three-month high of $US1.0585 set last week.

Markets paid only passing attention to minutes of the Reserve Bank of Australia latest policy meeting, which showed the rate cut on December 4 was a much closer call than the done-deal scenario many had assumed.

“Effectively the Board brought forward a potential rate cut in February to the December meeting. This means a fresh case has to be made for yet another cut in February,” said Robert Henderson, chief economist markets at National Australia Bank.

4:32pm: The miners were the best performers of the blue chip stocks today, enjoying a nice run with the iron ore price up around $US130 per tonne:

  • BHP: +0.9%
  • Rio: +1.9%
  • ANZ: +0.1%
  • CBA: +0.3%
  • NAB: +0.5%
  • Westpac: +0.2%
  • Fortescue: +2.9%
  • Woolworths: +0.8%
  • Wesfarmers: +0.9%
  • Telstra: +0.2%

4:19pm: Among the sectors, materials jumped 0.9 per cent, consumer discretionary rose 1 per cent and financials push up 0.2 per cent. Energy traded relatively flat, down just 3.2 points, and IT stocks slipped 0.3 per cent.

4:14pm: The market has closed higher but has slipped back under 4600 after holding above it for much of the afternoon, the S&P/ASX200 added 21 points, or 0.5 per cent, to 4595.2, while the broader All Ords rose 22.5 points, or 0.5 per cent, to 4610.5.

3:50pm:Air Canada is considering adding a second Australian destination – most likely Melbourne – in an attempt to boost the number of Australian tourists visiting Canada.

Speaking in Sydney today, the airline’s chief executive, Calin Rovinescu, said he was eager to do more to promote Canada as a tourist destination because ‘‘we are just scratching the surface’’.

Air Canada has boosted weekly flights on the Sydney-Vancouver route – the longest in its network – from seven to 10 in an attempt to take advantage of the busy Christmas travel period and tap the number of Australians eager to fly to North America to ski. 

3:38pm: The upswing in net overseas migration has important implications for Australian housing market demand/supply fundamentals, according to ANZ economists.

  • The re-acceleration in population growth, along with ongoing weakness in the residential construction cycle is likely to place further pressure on demand/supply fundamentals, resulting in an increase in the scale of Australia’s pent-up demand for housing. 
  • As such, we are expecting residential vacancy rates to remain well below their historical long-term averages across most major capital cities, which will support rental growth. Indeed, advertised rents, for example, are running at around 11% y/y in Sydney and 21% y/y in Perth implying that average rents will continue to rise. We expect increased rental cost pressures, combined with improving affordability will continue to attract investors and first home buyers into the home buying market.  
  • Even if population growth begins to moderate, the housing market will likely remain well supported given the significant under building of housing for the better part of a decade which has left Australia with a significant pent-up demand for housing. 

3:30pm: Mid-tier broker Wilson HTM is to take on Investorfirst’s adviser and analyst team in return for access to Investorfirst’s HUB24 portfolio management software platform.

The deal, which involves no cash down on either side, is expected to see about a dozen Investorfirst employees, led by veteran broker Hugh Robertson and bringing in revenue of about $4 million a year, transfer to Wilson.

In return, Wilson has agreed to progressively move much of the $1.4 billion it manages on behalf of rich clients to HUB24.

The deal turns Investorfirst into a pure technology play based around the development of HUB24, which the company acquired two years ago in an all-scrip deal. 

3:16pm: Here’s a quick look at the best and worst performers among the ASX top 50:

3:08pm: A US judge has denied Apple request for a permanent injunction against Samsung Electronics’ smartphones, a court filing showed.

Earlier, Apple was awarded $US1.05 billion in damages after a US jury found Samsung had copied critical features of the iPhone and iPad.

2:58pm: A new mine will be built in Tasmania’s Tarkine wilderness, after federal Environment Minister Tony Burke gave final approval for Shree Minerals to go ahead with its Nelson Bay iron ore project.

Despite a long fight against the project from environmental opponents, Mr Burke approved the project with 29 conditions that will govern its operation.

The area is particularly important for Tasmanian Devils, as parts of the North West are believed to house the only Devils that are not suffering from facial tumours.

One of the conditions set by Mr Burke specifically related to the protection of Devils.

2:51pm: China home prices are showing fresh signs of recovery as a two-year long government campaign to curb prices frays.

Average home prices in 70 major cities across China rose 0.3 per cent in November from the previous month, after a 0.05 per cent rise in October, according to Reuters’ calculations from data released by the National Bureau of Statistics.

Real estate, which directly impacts around 40 other business sectors in China, is a key driver in the world’s second-largest economy, which is reviving from a lacklustre third quarter.

The signs of a turn in property coincide with other November data published recently which showed industrial output and retail sales rising at their fastest annual pace in eight months, reinforcing views that growth in the fourth quarter will accelerate from the third quarter’s 7.4 per cent.

“The risk of tightening property curbs is accumulating due to rising home prices along with reviving economy and stabilising investment,” said Zhao Xinkui, a property analyst with Huarong Securities in Beijing.

2:31pm: Cotton On Kids has been fined $1 million for selling children’s nightwear that breached fire safety standards.

Justice Richard Tracey of the Federal Court in Victoria ordered the discount children’s clothing store to pay the Commonwealth $1 million within 15 months and contribute $5000 towards legal costs, following action by the Australian Competition and Consumer Commission.

Here’s the whole story

2:29pm: Here’s how the regional markets are doing, showing that the ASX200’s 0.75 per cent gain isn’t bad on the day:

  • Japan (Nikkei): +1.1%
  • Hong Kong: +0.3%
  • Shanghai: -0.2%
  • Taiwan: +0.1%
  • Korea: +0.05%
  • Singapore: +0.3%
  • New Zealand: +0.3%

2:18pm: Banking analysts estimate CBA would have paid ‘Aussie’ John Symond at least $165 million for the 47 per cent stake in Aussie Home Loans, which took the bank’s total stake in the mortgage broker to 80 per cent.

This is equivalent to little more than a week of of earnings for CBA, the nation’s biggest lender.

The calculation is based on value of between $350 million and $400 million for the business. However, analysts caution a valuation at the top end would be optimistic given a subdued mortgage market.

Aussie Home Loans last year returned a profit of $32.6 million, down from $51.7 million a year earlier. The business last year had net tangible assets of $138.5 million.

1:53pm: Looking overseas: shares in Fukushima operator Tepco have soared nearly 28 per cent, its second huge jump in as many days after Shinzo Abe’s election triumph cast doubt on plans to ditch atomic power.

The utility giant was up 27.72 per cent at 258 yen in early trade before easing to 229 yen by the break, still up 13.36 per cent.

The rally came after Tepco – whose Fukushima Daiichi plant was at the centre of last year’s tsunami-sparked atomic crisis – rocketed 32.89 per cent to 202 yen on Monday. However, the firm’s stock is still a fraction of its pre-disaster price above 2100 yen.

1:37pm: IG Markets analyst Stan Shamu said progress in budget talks in Washington were behind the gains on the ASX today.

‘‘It’s all about the fiscal cliff negotiations at the moment,’’ Mr Shamu said. ‘‘It seems there’s some progress being made and people are looking more optimistic.’’

1:10pm: Australia’s population is expanding at the fastest pace in almost three years as more skilled migrants seek jobs.

Figures from the ABS released show Australia’s population grew by 1.6 per cent, or nearly 360,000, in the year to June. That was the fastest pace since the third quarter of 2009 when the global financial crisis led the Labor government to start cutting back on migration.

The annual rate of population growth was also up markedly from the trough of 1.14 per cent touched early last year, thanks largely to a revival in migration levels.

Net overseas migration added a net 208,300 people in the year to June, an increase of 22 per cent on the previous 12 months. Arrivals of 472,100 handily outstripped departures of 263,800.

12:50pm: Sirtex is on a roll today, rising 5.2 per cent, on the back of the decision by S&P to include the stock in the ASX200 from December 24. Earlier today, it hit an all-time high of $13.10, up 7.8 per cent.

Despite the recent rally, the stock’s market capitalisation is still well below $1 billion, at $713 million.

Sirtex will take up the spot of Integra Mining, which falls out due to its merger with Silver Lake Resourecs.

12:24pm: International merchandise imports on a balance of payments basis rose 2 per cent in seasonally adjusted terms to $21.76 billion in November, compared to $21.24 billion in October.

Imports of capital goods rose 2 per cent, or $124 million, while consumption goods rose 3 per cent, or $163 million, the ABS said. Imports of intermediate goods increased 5 per cent, or $411 million, with fuel up 6 per cent.

Imports of non-monetary gold dropped by a third, or $179 million.

In original terms, imports rose 3 per cent to $22.88 billion in November, partly due increases in machinery and fuel.

11:50am: Australand has denied it has been approached by rival Mirvac with any takeover offer.

In response to press reports today that its management was in talks about a possible $7 billion merger with Mirvac, the directors of Australand said: ‘‘Australand advises that it is not in receipt of any such proposal’’.

However, analysts have said that since GPT said it was commited to making a bid for Australand’s non-residential assets, it’s ‘‘game on’’ for the real estate investment trusts.

Many have predicted that with the REIT’s now trading at a premium to their net tangible assets, the idea of making a pitch for a rival was more attractive.

Australand shares are up 1.8 per cent.

11:42am: The dollar has hardly reacted to the RBA minutes, trading at 1.0552, slightly up from $US1.0545 before the minutes were published.

The chances of a 25 basis point cut at the next RBA meeting in February have slipped slightly to 58 per cent, from 63 per cent prior to the release, according to cash rate futures.

Against the yen the dollar is at 88.5 yen, hovering close to 21-month highs hit yesterday, and versus the euro it’s buying 80.2 euro cents.

11:40am: Paint maker DuluxGroup has acquired 90 per cent of building supplier Alesco, bringing a lengthy takeover close to an end.

The company announced the final stage of the acquisition, which began with a hostile bid in May, to the market ahead of its annual meeting with shareholders.

Dulux will now begin compulsory acquisition of the remaining 10 per cent of the company, which supplies construction products and garage doors.

11:38am: Some more on the RBA minutes:

The bank says it cut the cash rate in December to support underperforming sectors of the economy, including housing construction and retail, ahead of the expected peak in the mining investment boom. The RBA was concerned industries away from the mining boom continued to struggle.

According to the minutes, the RBA board also believed the soft jobs market and slower wage growth meant a rate cut was unlikely to cause a blowout in inflation.

‘‘At the meeting, the information on labour costs and softening labour market conditions suggested the inflation outlook still afforded the board some scope to provide additional support to demand,’’ the RBA minutes say.

‘‘Further confirmation that the peak in resource sector investment was near, and that the short-term outlook for non-resources investment remained subdued, indicating there was a case for the board to provide that support.’’

11:36am: James Packer and Lachlan Murdoch have increased their stake in Ten Network to just below the takeover threshold, the AFR is reporting. The duo have moved to a 19.9989 per cent shareholding, up from 17.88 per cent the previously.

The lift in shareholding was a result of Ten’s $230 million capital raising, according to a letter filed to the ASX by Packer’s private company Consolidated Press Holdings.

11:31am: The RBA minutes are out – the bank says signs of a softer labour market gave it scope for its December rate cut.

Click here to read the minutes

11:28am: Asian shares have inched higher in early trade, tracking the overnight gains in US stocks on optimism for progress in resolving the US budget crisis before the year-end deadline.

MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.2 per cent, after ending an eight-day winning streak on Monday as investors took profits from last week’s rally. South Korean shares opened up 0.4 per cent.

US President Barack Obama and top Republican John Boehner met at the White House on Monday, with simple evidence of ongoing communication keeping alive hopes that Washington will be able to resolve the budget crisis.

“There was no meaningful breakthrough in the negotiations, but the high-level meetings do improve investor sentiment,” says Kim Soon-young, an analyst at IBK Securities.

While the fiscal cliff remains a major focus for markets, prices may become unlikely to rise with players taking profits to close their books before leaving for the holidays, traders said.

11:23am: Some news from overnight: European Central Bank president Mario Draghi says ECB policies and governance reforms in the euro area have revived confidence that will help foster a gradual economic recovery in the second half of next year.

A commitment in July to preserve the euro at any cost and the establishment of a single banking supervisor have improved financial-market sentiment, Draghi said in Brussels yesterday. One priority for 2013 is now to create a single resolution mechanism to complete Europe’s banking union, he said.

‘‘The impression that one has of this year, at least of the second part of this year, is of a gradual improvement in financing conditions which is one of the reasons why we foresee a beginning of a recovery in the second part of next year,’’ Draghi said in testimony at the European Parliament’s Economic and Monetary Affairs Committee.

The Frankfurt-based ECB cut its economic forecasts earlier this month, predicting the 17-nation region will contract 0.5 per cent this year and 0.3 per cent in 2013.

11:16am: Toll Holdings has promoted Paul Coutts to chief executive of the transport and logistics firm’s global forwarding division.

Coutts, who will start in the role in February 2013, is currently the logistical division’s product, marketing and sales director. He will replace Hugh Cushing, who has announced his retirement after 37 years with Toll.

11:01am:Commonwealth Bank has boosted its stake in Aussie Home Loans from 33 per cent to 80 per cent and has secured to buy the remaining 20 per cent. 

In a statement just released, the bank said: 

John Symond will remain as Executive Chairman and Aussie will continue to operate as a standalone mortgage broker and financial services provider.

Commonwealth Bank Group Executive Group Strategic Development, Rob Jesudason said: 

“We recognise the strength and reputation of the Aussie brand and name in the Australian mortgage market and also the importance of broker distribution of home loans and other financial products.  We are delighted to increase our investment in Aussie and continue the relationship between the Commonwealth Bank Group and Aussie.”

10:57am: The ASX200 has followed the All Ords to a fresh 2012 peak. The benchmark index just hit 4603.9, the highest since 22 July last year. It’s nearing a gain of 0.7 per cent for today.

The next target for the ASX200 is closing above 4564.9, which was reached on 8 July, 2011.

10:41am: Like most sectors on the ASX200, the banks have enjoyed a positive start to the day:

  • CBA is 0.83% higher to $61.80
  • NAB is 1.18% higher to $24.77
  • ANZ is 0.24% higher to $24.55
  • Westpac is 0.64% higher to $25.91

10:29am: In a barnstorming open, the ASX200 got very close to its 52-week high, hit last week. Last Wednesday, the ASX200 hit 4603.5, and in opening trade today it rose to 4601.4. 

Meanwhile the All Ords has recorded a new high for 2012, touching 4615 in opening trade. It has since eased back to 4613.8.  

10:19am: Lots of miners and energy companies among the early leaders on the ASX200:

  • Paladin Energy: +5.70%
  • Mount Gibson: 4.73%
  • Altas Iron: +4.31%
  • Macmahon Holdings: +4.26%
  • Linc Energy: +4.21%

10:18am: All sectors on the ASX200 are higher and strongly so, led by defensives. Here’s the early scorecard:

  • Consumer disc: +1.16%
  • Health: +0.92%
  • Consumer staples: +0.68%
  • Utilities: +0.65%
  • Industrials: +0.6%
  • Materials: +0.53%
  • Financials: +0.48%

10:12am: In early trade, the All Ordinaries index is 27 points higher, or 0.6 per cent, to 4615.0, while the benchmark S&P/ASX200 is 28 points higher, or 0.6 per cent, to 4601.4.

10:04am: Futures market points to a bullish open:

10:01am: We’ll dig around for more on this, but here’s an interesting note from JPMorgan on the Aussie banks:

9:58am: Ric Spooner at CMC Markets said although there was little news to change the market outlook last night, “local investors are likely to respond to the positive tone set by US markets”.

In the current low interest rate environment and with many investors still underweight equities, buyers are conscious of the possibility of a stronger year end.

The local market will also be supported this morning by another positive day for iron ore which rose to $132.30 yesterday. 

Despite a likely firm beginning, last week’s index high of 4603.5 will be a technical resistance level for traders today. Chances are this resistance will contain the market. However, a break into clear ground above 4604 could trigger increased buyer momentum. 

9:56am: A quick look ahead to the day’s news:

  • Minutes of Reserve Bank of Australia monthly board meeting released – 11.30am
  • ABS International merchandise imports for November
  • DuluxGroup annual general meeting
  • Funtastic annual general meeting
  • Incitec Pivot annual general meeting

9:44am: The iron ore price has added to its recent strong run, posting a tenth consecutive day of gains. It added $US2.90 overnight to $US132.20:

9:40am: A quick wrap of the overnight action from ANZ. Markets were quiet overnight, with little in the way of data or news flow.

European equities ended marginally weaker in a choppy session of trading. US stocks fared better, with the S&P500 currently trading around 0.7% higher. US Treasuries sold off slightly at the long end as did core European bonds. Resource commodities were mixed, with base metals weaker, crude prices flat to higher and precious metals mixed.

9:38am: Australian shares are set for a strong start after Wall Street rose on optimism about progress towards a budget deal in Washington.

For a comprehensive look at this morning’s business news, check today’s need2know. Here are this morning’s key markets numbers:

  • SPI futures was 22 points higher at 4595
  • The $A is higher at $US1.0543
  • In recent trade in New York, the S&P500 was 0.85% higher at 1425.57
  • In Europe, the FTSE100 lost 0.16% to 5912.15
  • China iron ore added $US2.90 to $US132.20 a metric tonne
  • Gold added 0.1% to $US1696.09 an ounce
  • WTI crude oil added 47 US cents to $US87.20 a barrel
  • Reuters/Jefferies CRB index added 0.75% at 294.89

9:37am: Good morning folks. Welcome to the Markets Live blog for Tuesday.

Contributors: Thomas Hunter, Jens Meyer, Max Mason

This blog is not intended as investment advice

BusinessDay with agencies

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