Market Wrap: ASX sees biggest jump in 18 mths

Market Reports

The Australian share market rallied to more than cover yesterday’s losses, accelerating after the RBA’s interest rate call to close 2.3 per cent higher, its most boisterous one day gain in over 18 months. All the major sectors finished in the black but it was in materials where the strongest gains were seen, particularly among gold stocks, with Newscrest, Perseus and Oceanagold all seeing big lifts. 

The Australian dollar
 
The Australian dollar reacted strongly to the RBA call, falling nearly half a cent after the central bank said it believes there is scope for more easing, and possible that the exchange rate will depreciate further despite easing by around 10 per cent since April. The Australian dollar is buying $US0.916.
 
The S&P/ASX 200 index closed 124 points up to finish at 4,834. The value of trades was $4.4 billion on volume of 807 million shares at the close of trade. The top three stocks by value were Commonwealth Bank of Australia (ASX:CBA), BHP Billiton Limited (ASX:BHP) and Westpac Banking Corporation (ASX:WBC)
 
On the futures market the SPI is 104 points up.
 
Economic news

The Reserve Bank of Australia (RBA) has moved in line with expectations and kept Australia’s official cash rate unchanged at a record low of 2.75 per cent. RBA Governor Glenn Stevens says easier financial conditions now in place will contribute to a strengthening of growth over time. 
 
Company news  
 
Mirabela Nickel Limited (ASX:MBN) shares fell 18.18 per cent after it cut its production guidance for 2013 because of the impact of maintenance work and disruptions to its explosives supply. The Perth-based, Brazil-focused miner now expects to produce between 17,000 and 18,500 tonnes of nickel concentrate this calendar year, down from its previous target of between 22,000 and 24000 tonnes.
 
Boart Longyear Limited (ASX:BLY) shares slumped 11.20 per cent after the drilling services company had its corporate debt rating downgraded by Investor services firm Moody’s. It was Boart’s second downgrade in less than two months.
 
Troy Resources Limited (ASX:TRY) shares saw further gains today, gaining 5.7 per cent after the gold and silver producer declared its takeover offer for Azimuth Resources unconditional. 
 
Mayne Pharma Group Limited (ASX:MYX) firmed 2.3 per cent after announcing the acquisition of US company Libertas Pharma, a purchase Mayne says will be earnings accretive in the current financial year. 
 
Brambles Limited (ASX:BXB) shares lifted 2.97 per cent with the pooling solutions company announcing it will demerge its information management business Recall, and maintained its full year underlying earnings guidance. 
 
Sundance Resources Limited (ASX:SDL) shares gained 2.86 per cent as the iron ore explorer announced is still seeking partners for the development of its iron ore project in central Africa, and aims to reach the final negotiations stage by the end of the year.
 
Best and worst performers

All the major sectors finished up. The best performing sector was Materials adding 312 points to close at 8,695.
The sector with the fewest gains was Telco services, adding 26 points to close at 1,638 points.
 
The best performing stock in the S&PASX 200 was Decmil Group Limited (ASX:DCG), rising 15.94 per cent to close at $2.00. Shares in St. Barbara Limited (ASX:SBM) and OceanaGold Corporation (ASX:OGC) also closed higher.
 
The worst performing stock was Boart Longyear Limited (ASX:BLY), dropping 11.2 per cent to close at $0.56. Shares in New Newscorp Inc. (ASX:NNC) and Seven Group Holdings Limited (ASX:SVW) also closed lower. 
 
IPOs 

GPS Alliance Holdings Limited (ASX:GPS) started trading today. The real estate company floated with an issue price of $0.20, opened at $0.18 and closed at $0.20. 
 
Commodities

Gold is trading at $US1,258 an ounce. Light crude is $0.02 down at $US97.97 a barrel.