ASX briefly back above 6200 but fails before the week ends (PMV, RIO)
WHAT MATTERED TODAY
The market briefly tipped back above 6200 for the first time in over a fortnight before easing back throughout the afternoon – although buying on the close added ~12points, it wasn’t enough to push the index back above that resistance level. Resources again led the push higher along with the tech sector which was pulled higher by After pay ending a bad week on a good note, and Xero resuming its climb higher. Similar to yesterday, Utilities were weak with interest rate sensitivity, although selling wasn’t as severe today.
Overall, the index closed up +25 points or +0.41% today to – up 29pts/+0.47% on the week
ASX 200 Chart
ASX 200 Chart
CATCHING OUR EYE
Broker Moves; Rio Tinto was upgraded by Morgans overnight while Macquarie also wrote a bullish piece on the miner. Macquarie is looking for more stock to be bought back over 2019 as Rio continues to divest assets, handing back cash to shareholders – a theme that can only support the stock. Macquarie have a $91 price target.
Premier Investments was taken to the cleaners today following yesterday’s FY18 result. The result as ok, and broadly in line with market expectations, however the outlook was soft forcing three brokers to downgrade ratings. PMV ended the day down -4.21% to $18.20
RATING CHANGES;
· Rio Tinto Upgraded to Add at Morgans Financial; PT A$81.32
· Woodside Upgraded to Outperform at Credit Suisse; PT A$40.50
· A2 Milk Co Downgraded to Hold at Morningstar
· Brickworks Upgraded to Hold at Morningstar
· Reliance Worldwide Raised to Hold at Deutsche Bank; PT A$4.80
· Premier Investments Downgraded to Sell at Citi; PT A$17
· Premier Investments Cut to Hold at Deutsche Bank; PT A$18.50
· Premier Investments Cut to Hold at Bell Potter; PT A$19.60
· Viva Energy Group Rated New Buy at UBS; PT A$2.85
· CBA Downgraded to Hold at Bell Potter; PT A$78
Weekly Moves – Stocks & Sectors;. On a sector level, interest rate sensitive stocks were in the firing line with industrials coming off the worst. Materials had a great week after a period of softness with the US tariff impacts lower than expected
Sectors over the past Week
On a stock level, aged care provide Estia sunk to the bottom of the pile with the Royal Commission and ABC investigation putting the sector under pressure early in the week. On the other side, the smaller resource names dominated the best performers as they bounced back.
Stock moves over the week
OUR CALLS
No changes the portfolios today.
Watch out for the weekend report. Have a great night,
Harry & the Market Matters Team
Disclosure
Market Matters may hold stocks mentioned in this report. Subscribers can view a full list of holdings on the website by clicking here. Positions are updated each Friday, or after the session when positions are traded.
Disclaimer
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