Santa rally erases Friday falls: ASX 1.6% higher at noon

Market Reports

by Jessica Amir

The Australian share market started December in the black, erasing Friday’s 1.6 per cent sell down with the S&P/ASX 200 index 1.6 per cent or 92 points higher at 5,759 at noon.

From the get-go, we had positive US equity leads to follow with the major indices up indices up 0.8 per cent on Friday, on hopes of a US-China trade deal, which did come through. And overnight on the back of that deal, the Australian dollar hit a five-day high. On the futures market the SPI is 79 points higher.

All sectors are leading the Santa rally at noon with the small information technology up the most, Energy, Healthcare, and Materials up over 2 per cent with the other seven sectors up at least one per cent.

Santos' (ASX:STO) JV project in Darwin, the Bayu Undan infill program has been completed ahead of time and 40 per cent under budget, lifting its shares almost 6 per cent higher at noon and its 13 per cent higher year-on-year.

Broker moves

Citi advised it has maintained its sell stance in Coca-Cola Amatil (ASX:CCL) and dropped its 12-month price target from $8.90 to $8.15. While CCL trades 1.2 per cent higher at noon to $8.74. Citi forecasts its EPS to fall 5 per cent in FY19 with its corporate, food and services division to see a loss in FY18 and FY19, on the back of property being sold. On top of this, the broker highlighted Indonesia is facing slower volume growth.

Company news

Graincorp (ASX:GNC) received a $2.4 billion non-binding takeover proposal from Long-Asset Term Partners for $10.42 per share. The proposal is subject to a number of conditions and involves a complex finance structure with significant leverage, including $3.2 billion acquisition facility from Goldman Sachs and $400 million from Westbourne Capital. The board has advised shareholders not to take any action until it has completed its ongoing portfolio review. Shares in Graincorp Limited (ASX:GNC) hit a year high today, jumping 26.7 per cent to $9.25 at noon. Year-on-year its shares have added 21 per cent.

Syrah Resources (ASX:SYR) reported a lift in graphite recoveries, from 53 per cent in the third quarter of 2018 to 74 per cent in November with consistent high-grade consistency (average fixed carbon content of over 95 per cent in November. It also advised it’s on track to achieve its full-year 2018 production target of 101 kilotons to 106 kilotons of graphite concentrate. Shares in Syrah Resources Limited (ASX:SYR) are trading 11 per cent higher at $1.81 at noon. Year-on-year its shares have fallen 61 per cent, but on the 29 October 2018 it started to trend higher, after hitting multi-year lows.

Best and worst performers

The best performing sector Energy adding 3.3 per cent, while the worst performing sector is Real Estate Investment Trusts, gaining 0.8 per cent.

The best performing stock in the S&P/ASX 200 is Graincorp Limited (ASX:GNC), rising 26.7 per cent to $9.25, followed by shares in Syrah Resources Limited (ASX:SYR) and Bluescope Steel Limited (ASX:BSL).

The worst performing stock in the S&P/ASX 200 is Metcash Limited (ASX:MTS), dropping 5.4 per cent to $2.62, followed by shares in St Barbara Limited (ASX:SBM) and Ausdrill Limited (ASX:ASL).

Commodities and the dollar

Gold is trading at US$1,223 an ounce.
Iron ore price fell 0.8 per cent to US$65.95 and its futures are pointing to a rise of 3.6 per cent.
One Australian dollar is buying 73.59 US cents.

Cryptocurrencies

Bitcoin has fallen 2.6 per cent to US$4,140, Ethereum has fallen about 2.5 per cent to US$116 and EOS has fallen about 4.7 per cent to US$2.84