** 15/02/11 - 9.30am - by James Gerrish**
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We saw a great move in the local market yesterday with the benchmark up +54 points or +1.12% to close at 4935.
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The move was underpinned by a strong rally in Asian markets (CHECK CHINA CHART HERE)
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We discussed yesterday the importance of Asian markets to the local bourse and given China has now broken out of its current trading range, this should be a positive for our market in the short term.
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US stocks were mostly higher last night with the S&P 500 closing in the green whilst the DOW JONES was just in the red down -5 points or -0.04% to close at 12268.
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Volume was very light on the NYSE last night and this suggests that the recent rally may be starting to lose some stream.
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In London the FTSE 100 was also down -2 points or -0.05% to close at 6060.
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Commodities were pretty much HIGHER accross the board in London with reports from China out yesterday which showed exports rose more than forecast.
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One stat that was pretty impressive showed that the value of Iron Ore imports rose +51% in January highlighting a combination of strong demand and rising spot Iron Ore prices. Confirms what the market was looking.
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Locally, SPI FUTURES are pricing in a rise of +7 points when trading kicks off this morning.
Further to yesterday afternoon’s update, TOLL HOLDINGS, is another stock worth some consideration.
TOLL HOLDINGS (TOL) – TOL is an integrated supplier of transport and logistics services in Australia and NZ and increasingly across the Asian region. The company recently announced that long standing Chief Executive Paul Little will step down and a global search for a new CEO is under way. This uncertainty has seen the stock sold down quite aggressively over the past few months to a low near $5.70. From a valuation perspective, we see TOL trading on a P/E of 13.8 times forward earnings, is yielding 4.3% and has a clear expansion path within the high growth areas of Asia.
Technically, the stock has found support and short term momentum appears to be on the upside. A first higher low was put in place at the end of January whilst short term resistance sits at $6.35.
BUY a break of $6.35 with a $7.00 Target. Run a protective stop below the position.
