Choppy action continues (RWC)
WHAT MATTERED TODAY
October started on the front foot with the idnex getting off to a better than expected start. The US gave us a strong lead; however futures were originally pointing to just an 11 point gain prior to reopening. By the time equities were opening, investors had woken up to the disparity in performance between our futures and overseas indicies. The +100 pt marker was the sticking point though – the index had a push at the 5915 level 3 times throughout the day with each turn failing to go on with it. The final effort came with around 90 minutes left in the session before equities rolled gave up mmuch of the good work to close 44pts below the high.
Property stocks were the best bid, gaining more than 2%. Retail focused names were the pick of the bunch as investors pin the hopes low case numbers leading to increased foottraffic, and hopefully bring the end of rent wars with many retailers. Materials were a distant second – iron ore names were well bid on a strong iron ore print, though China now enters the “Golden Week” holiday which means trading in iron ore will be light until the back end of next week. While all sectors finished higher, consumer staples only marginally broke the into the black.
By the close, the ASX 200 was up by 57pts / +0.98%. Dow Futures are trading up 234pts/+0.85%
ASX 200 Chart
ASX 200 Chart
CATHCING MY EYE
Reliance Worldwide (RWC) +10.47%: the standout today, held an investor day which saw the company tracking ahead of expectations through the first quarter of the year. The plumbing manufacturer noted that strong growth in the north Americas had continued and was still more than offsetting some weaker performance seen in the Asian segment. Europe had also seen pent up demand come through following the lockdowns as August and September saw 5% & 24% growth on the prior year to more than offset the -4% seen in July. Reliance singled out Australian operations as a weak point, noting the falling building approvals and new starts weighing on demand. A nice pop above $4 for the stock today though, the breakout looks reasonable. Perhaps the comments are a red flag for names leveraged to local construction in the near term though.
Reliance Worldwide (RWC) Chart
BROKER MOVES
· Whitehaven Raised to Buy at Shaw and Partners; PT A$2
· Hub24 Cut to Hold at Morgans Financial Limited; PT A$18.10
· Platinum Asset Raised to Buy at Morningstar
· Bank of Queensland Raised to Buy at Morningstar
· Fortescue Raised to Neutral at Credit Suisse; PT A$16.50
· BHP Raised to Outperform at Credit Suisse; PT A$39
· BHP Group PLC Raised to Outperform at Credit Suisse
· Rio Tinto Raised to Neutral at Credit Suisse; PT 5,000 pence
OUR CALLS
No changes today
Major Movers Today
Have a great night
Harry & the Market Matters Team
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