Month: September 2015
The market has been looking for signs of confidence and they arrived yesterday in Asia Pacific time then carried through to European and US markets. Australian equities rallied strongly yesterday (almost 1.7%) aided by strong US Futures and a solid China market but it was the Energy Sector rallying over 4% that really caught the eye.
- The ASX 200 was up across the board today, finishing on its high at 5,211, up 106 points (+2.1%).
- The banking sector performed very strongly today. Australia New Zealand (ANZ) was up 3.7% to $28.54, Commonwealth Bank (CBA) up 3.4% to $76.72 and National Australia Bank (NAB) +3.5% to $31.27, whilst Westpac Bank (WBC) was the shining star, up 4.2% to $31.81.
- The miners too, were well bought, despite BHP Billiton (BHP) Ex. Dividend today (85.71c), BHP finished down just -5c to $24.65. RIO Tinto (RIO) closed +$1.28 (2.6%) to $51.51. Fortescue Metals (FMG) pushed up strongly during the day to a high of $2.15, however only managed to finish 8c higher (+4.1%) to $2.04.
- The Australian dollar (A$) was strong, which obviously added to the strength in our market. The A$ rose back above US70c and is currently a little off its intraday high at US70.54c.
Best Sector – Financials
- The ASX 200 managed to move into the black from the get go and generally remained that way, before getting stronger towards the end of the day. The market finished up 85 points (+1.7%) to 5,115.
- The energy sector showed the way as expected this morning, with the announcement that Woodside Petroleum (WPL) made a takeover bid for Oil Search (OSH). WPL has offered 0.25 shares for every OSH share. Subscribers received a live trading alert on accumulating an energy stock today.
- The banks were also widely sought after, with the banking index up 2.0%. Australia New Zealand Bank (ANZ) closed up 83c (+3.1%) to $27.53, Commonwealth Bank (CBA) closed up $1.85 (+2.6%) to $74.17, National Australia Bank (NAB) was up 59c (+2%) to $30.20 and Westpac (WBC) closed up 72c (2.4%) to $30.52.
Best Sector – Energy
Looking at the ASX200’s five best stocks of the last month
The ASX 200 had a quiet, but the usual roller coaster ride today finishing the day down 10 points (-0.2%) at 5,030, after trading as low as 4,973.
OverviewAs we have been pointing out, markets repeat themselves in many ways including chart patterns, price and time measures, and seasonal statistics. We have just experienced the worst month in over 3 years and now it’s September, historically the weakest month for US equities going back to 1927.We believe that US equity markets are now due for 4/5 weeks of choppy price action into October prior to forming a good bottoming pattern and a classic rally into Christmas. Whether the US Indexes or the ASX200 actually make fresh 2015 lows is uncertain but, as discussed in our weekend report, if we witness any fresh lows the likelihood is that they will be brief.
- A choppy and quiet session was experienced in the ASX 200 today as expected. The broader market had a solid open, though it weaved in and out of positive terrirory for the day, before it closed 13 points higher (+0.3%) at 5,040.
- With no surprise, BHP outperformed the benchmark and closed 1.5% higher at $24.69. Its rival, RIO also outperformed the broader market, ending its day 1% higher to $49.76, whilst Fortescue Metals (FMG) lost 1.6% to $1.86.
- Santos (STO) continues to slide, down 3.3% to $4.38 for the day, making it down 17.2% for the week and down 40.1% since August. Concerns of a capital raising continues to mount with this company.
- In the Mergers and Acquisitions (M&A) area, Echo Entertainment rallied 2.2% higher to $4.74 after the NSW government approved its suitor Genting, to increase its current RGP stake from 6.6% to 23%.
- Please watch out for the weekend report.
The markets continue in their current state of uncertainty with few participants wanting to take significant overnight or new investment risk. The fading of our market yesterday and the US markets (although to a much lesser degree) overnight illustrates this risk aversion.
- A total reverse of yesterday was witnessed in the ASX 200 today, having opened strong and on its highs early in the morning, investors seemed to have lightened their positions and took risk off the table as the markets in China began their long weekend.
- The Banking sector was damaged in this volatile market; Commonwealth Bank lost 2.3% to $71.97 and National Australia Bank (NAB) down 2.5% to $29.93.
- Fortescue Metals (FMG) was the diamond in the Iron Ore Rough, having rallied 1.9% to $1.89, while BHP closed 1.3% lower at $24.32.
- Mergers and Acquisitions remain to be present in the Aussie market, with speculation that Woodside Petroleum (WPL) is looking to make a $10.2b play and merge with OilSearch (OSH). WPL closed 2.1% lower at $30.46, while OSH ended 3.6% higher at $6.89.
Best Sector – IT
Another fascinating day in the markets! Price action continues to support our belief that the Australian market is in a strong ‘buy’ zone. As reported on Tuesday, our analysis of past time cycles adds additional support to our current view of the market.
Really bullish, there's more to go in the reflation rally
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