Market Wrap: ASX surges, dollar drops after RBA rate cut

Market Reports

The Australian share market has gone gang busters in afternoon trade to close up 1.46 per cent for the day. The market moved higher on open but took a real swing for the stars after the Reserve Bank voted to drop interest rates to the new all time low of 2.25 per cent. The Aussie dollar was smashed by currency traders after the release, tumbling around 1.5 cents in just a couple of hours.
 
The S&P/ASX 200 index closed 82 points up to finish at 5,707. 
 
The value of trades was $5.97 billion on volume of 919 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 ANZ Banking Group (ASX:ANZ).
 
On the futures market the SPI is 78 points up.
 
Economic news

Better than expected figures from the ABS on the trade deficit today. The trade gap between imports and exports came in at $436 million in December, down from $925 million in November and more than analyst expectations of $850 million. 
 
And ABS building approvals remained elevated in December after reaching their highest ever monthly level during November. The December figures showed new home approvals were 3.3 per cent lower that the November record however they were 8.8 per cent higher than December last year. Multi-unit approvals continue to be the main driver and detached house approvals are steady, up 1.1 per cent in December. New South Wales remains the best performing state for building approvals. 
 
Company news
 
Shares in Beach Energy Limited (ASX:BPT) have taken a turn for the better after news that Seven Group Holdings Limited (ASX:SVW) has purchased a 13.8 per cent stake in the explorer. The Kerry Stokes-owned media company has been busy acquiring oil and gas shares since former Woodside CEO Don Voelte took the helm the group a little under two years ago. Seven Holdings recently acquired Nexus Energy and has also taken a significant stake in Woodside. Beach Energy shares have been falling steadily since the oil price started sinking but were up15.59 per cent today to close at $1.17. 
 
Federation Centres Limited (ASX:FDC) and Novion Property Group (ASX:NVN), formerly CFS Retail Property Trust Group, have outlined a merger plan to create an $11 billion entity. Both boards have unanimously backed the transaction which will now undergo court, regulatory and shareholder approvals. Once merged, the property investment firm is expected to hold more than $22 billion of assets under management. 
Shares in Federation Centres closed 0.97 per cent up at $3.13. 

Decmil Group Limited’s (ASX:DCG) wholly owned subsidiary Homeground Villages has signed a three year licensing deal to use Enverro Limited’s (ASX:ERR)software platform.   
 
SeaLink Travel Group Limited (ASX:SLK) has expanded its Sydney Harbour fleet with the purchase of two high speed vessels for $6 million.  
 
Spotless Group Holdings Limited (ASX:SPO) continues on the acquisition trail buying leading air-conditioning company AE Smith.   
 
And Navitas Limited (ASX:NVT)has recovered some early losses in afternoon trade after revealing first half profit is down by 13 per cent due to one off write downs following the restructure of its US business. 
 
Best and worst performers

The best performing sector was energy adding 4.1 per cent to close at 11,497. The only sector to post losses today was healthcare, losing 0.2 per cent to close at 17,960 points.
 
The best performing stock in the S&P/ASX 200 was the aforementioned Beach Energy. Shares in Senex Energy and Karoon Gas also closed higher.
 
The worst performing stock was Navitas, dropping 9.52 per cent to close at $4.75. Shares in Sigma Pharmaceuticals and Qantas also closed lower.
 
Gold and the dollar

Gold is trading at $US1,275 an ounce. Light crude is $1.59 up at $US49.83 a barrel. The Australian dollar is buying 76.60 US cents.