Following yesterday’s horror day of losses the Australian market recovered some falls and ended 0.6 per cent higher with broad-based gains. The local benchmark spiked at open after a strong lead from Wall Street as optimism returned with encouraging earnings reports.
Stocks lost some steam as the session wore on but all major sectors still managed to end higher. The exception was the gold subsector which lost 2.7 per cent by close and dragged the gold miners to the top 200s worst performers by close.
Figures
The S&P/ASX 200 index regained 33.4 points today to end the session at 5,245.
The value of trades was $3.5 billion on volume of 656 million shares at the close of trade.
The top three stocks by value were BHP Billiton Limited
(ASX:BHP), Commonwealth Bank of Australia
(ASX:CBA) and Westpac Banking Corporation
(ASX:WBC).
On the futures market the SPI is 34 points higher.
Economic news
The World Bank has boosted its global growth forecast but cautioned of volatility in capital flows as America begins to tighten its monetary policy. The bank’s Global Economic Prospects report predicts global gross domestic product will grow 3.2 per cent in 2014 – from its last prediction of 3 per cent made in mid last year and from an annual growth rate of 2.4 per cent over 2013. The World Bank says for the first time in five years, there are indications a self-sustaining recovery has begun among high-income countries which suggests they may now join developing countries as a second engine of growth in the global economy.
In Australia, total new lending commitments gained 5.5 per cent in November after a fall the month before. According to the Australian Bureau of Statistics (ABS) housing finance commitments rose 1.9 per cent, commercial finance rose 8.3 per cent, personal finance rose 0.6 per cent and lease finance rose 1.9 per cent.
The ABS also reported new car sales continued to rise at the end of last year. The ABS reports new car sales rose by 1.7 per cent in December after a gaining on 2.1 per cent the month before.
Company news
Australia’s Big Four Banks were in the spotlight today after Fitch Ratings warned Australian banks face modest profit growth at best in the face of increasing competition and a weakening economy. The credit rating agency also cited a downturn in China as a big risk for local banks and cautioned the challenges facing the domestic economy will ripple over to the banks. Shares in Commonwealth Bank of Australia
(ASX:CBA) firmed 0.51 per cent today to end the session at $76.19.
Macquarie Group Limited
(ASX:MQG) made multiple headlines today after reports emerged the investment bank is mulling an offer of up to $US2 billion to buy JPMorgan's physical commodities business. A report on CNBC named Macquarie Group as among three shortlisted bidders also including private-equity firm Blackstone Group and investment company Castleton Commodities International. While Macquarie has not formally commented on the speculation the report says final offers are due next week. Shares in Macquarie Group gained 1.28 per cent today to end the session at $53.11.
Shares in OZ Minerals Limited
(ASX:OZL) soared to the best performer after the mining company said it hit its gold and copper production guidance and revealed its cash position fell less than expected last year.
Pilbara focused iron ore miner Fortescue Metals Group Limited
(ASX:FMG) says its plans to repay $US1.6 billion of debt will see gross debt drop to $US9.6 billion by the end of March.
Waste management company Tox Free Solutions Limited
(ASX:TOX) has secured two contracts – working for Rio Tinto Limited (ASX: RIO) in Western Australia and working for Titan Energy Services Limited
(ASX:TTN) in Queensland.
West Australian apartment developer Finbar Group Limited
(ASX:FRI) forecast its half year net profit is expected to rise to $19 million while its annual net profit looks to come in slightly lower than last year at $31 million.
Best and worst performers
All major sectors ended higher: The best performing sector was consumer discretionary, rising 28 points to close at 1,798.The sector with the smallest gains was materials, adding 33 points to close at 9,827 points.
The best performing stock in the S&P/ASX 200 was OZ Minerals Limited
(ASX:OZL), rising 14.01 per cent to close at $3.50. Shares in Paladin Energy Limited
(ASX:PDN) and Lynas Corporation Limited
(ASX:LYC) also closed higher.
The worst performing stock was Regis Resources Limited
(ASX:RRL), dropping 7.24 per cent to close at $2.69. Shares in Evolution
(ASX:EVN) and Silver Lake Resources Limited
(ASX:SLR) also closed lower.
Commodities
The price of gold has continued to head south today and is now buying $US1,240.15 an ounce. Light crude is $0.79 higher at $US92.59 a barrel.
Currencies
The Australian dollar has weakened this afternoon after the World Banks forecasts and the Aussie is now buying $US0.8916.
