The Australian share market has risen sharply this morning as investors await a big week of local economic data. All of the sectors except energy are in the green with NRW Holdings among the top performers in the first two hours of trade. The mining contracting company is trading at multi-year highs today of $3.13. The increase comes on the back of the company’s decision to purchase BGC Contracting.
Over the weekend oil slumped as much as 5 per cent ahead of a key OPEC meeting this week while iron ore also fell 1.5 per cent which is impacting our energy sector today this morning.
At midday the S&P/ASX 200 index is 33 points up or 0.5% at 6,879 and on track for a new daily record. On the futures market the SPI is 29 points higher.
Housing prices in most Australian cities are surging upwards with the Sydney and Melbourne property markets driving the rapid recovery, with values up by 2.7 per cent and 2.2 per cent respectively. CoreLogic’s national Home value index lifted 1.7 per cent over the month and delivered the fifth consecutive monthly increase, coupled with the largest monthly gain in the national index in 16 years.
Building approvals have fallen by 8.1 per cent in October, ending September’s short-lived revival. Market consensus had been for total approvals to fall by around 1.0 per cent after September's surprising 7.6 per cent boost.
Meantime, company profits are down 0.8 per cent well below an expected 1 per cent gain.
Morgan Stanley has increased its price target on Boral (ASX:BLD)to $5.00 from $4.50. The investment bank says the stock is currently trading at a meaningful discount to both peers and its historical valuation range. Following recent speculation on the possibility of a break-up, Morgan Stanley believes there is an opportunity to reduce gearing and realise value from assets that are non-core. However, the upside value an external party could extract would largely be negated by a traditional 25-30 per cent takeover premium. Morgan Stanley maintains an Equal-weight rating on the company. Shares in Boral (ASX:BLW) are 0.4 per cent higher at $5.16.
Buy now pay later company Sezzle (ASX:SZL) has secured a US$100 million debt facility to support future growth. The funding more than triples the size of the company’s prior US$30 million credit facility. The funds will support Sezzle’s expansion plans for its US debt financing relationships and further growth in merchant sales. Shares in Sezzle (ASX:SZL) are trading 4.2 per cent higher at $2.50.
Best and worst performers
The best performing sector is utilities, adding 1.3 per cent, while the worst performing sector is energy, shedding 0.4 per cent.
The best performing stock in the S&P/ASX 200 is Virgin Money UK rising 5.4 per cent to $3.53, followed by shares in NRW Holdings (ASX:NWH) and Silver Lake Resources (ASX:SLR)
The worst performing stock in the S&P/ASX 200 is Jumbo Interactive (ASX:GUD), dropping 6.2 per cent to $19.25, followed by shares in Afterpay Touch Group (ASX:APT) and Clinuvel Pharmaceuticals (ASX:CUV).
Commodities and the dollar
Gold is trading at US$1,461 an ounce.
Iron ore price lost 0.7 per cent to US$87.46.
Iron ore futures are pointing to a fall of 1.3 per cent.
One Australian dollar is buying 67.69 US cents.