ASX hits 5600!
What Mattered Today
Another solid session for ASX stocks with the market grinding higher on low volume – the typical pre-Christmas trade scenario and we continue to think that 5700 will come into play before the year is out. We’re not buyers of this rally though, but rather we’re keen to reduce market exposure into strength and we highlighted key levels for our holdings in this morning’s missive – if you didn’t see it, click here.
Golds the standout today with some relief buying after the metal put on $5 overnight – not overly inspiring and we doubt the strength will continue, but a relief rally from oversold levels may play out – similar to the relief rally in the high yield defensive plays like Transurban (TCL) of late! Interesting to see the Utilities sector up again and it’s fairly clear that this area of the market has become oversold and some fund managers reallocating into it.
The Utes and Golds have a lot in common, both are exposed to interest rates. The utes as they carry high debt and are typically high yielding so look good in a low rate environment while Gold, which yields nothing is more ‘tolerated’ when rates are low and ‘less tolerated’ when rates go up.
Regis Resources (RRL) Daily Chart
An article today in the Australian about Bellamy’s (BAL) claims the company may be trading insolvent, which is clearly poor news. Whether that is an exaggeration or not, time will tell however the stock still being suspended is clearly a pre-cursor to more bad news. I was on Sky Business today and some commentator suggested that the suspension may be for a takeover!! Don’t hang your hat on it – bad news for BAL is highly likely.
Watch for 4WD which lists tomorrow at 12.30pm – an open around listing price of $1.00 is worth considering.
We had a range today of +/- 49 points, a high of 5606, a low of 5557 and a close of 5591, up +29pts or +0.52%.
ASX 200 Intra-Day Chart
ASX 200 Daily chart
Sectors
ASX 200 Movers
What Matters Overseas
FUTURES mixed….
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