ASX falls short of new high: Aus shares close 0.2% higher

Market Reports

by Ortenzia Borre

It has been a positive day of trade for the Australian share market as the ASX was edging towards a new high though just fell short, closing 0.2 per cent higher. Silver Lake Resources (ASX:SLR) was the best performer followed by Virgin Money UK (ASX:VUK), after brokers increased the company’s price target, saying Brexit related risks had been reduced in recent weeks. Shares in Perenti (ASX:PER) also rose after the company confirmed its Surface Mining Industry Sector Group secured $165 million worth of new and extended contracts. The mining company also provided an update on its African Mining Services (AMS) business following last month’s tragic incident. As for the sectors today Utilities led the day and Energy fell lower.

The S&P/ASX200 index

At the closing bell the S&P/ASX 200 index closed 16 points higher to finish at 6,862.

Broker moves

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. 

Futures market 

Dow futures are suggesting a rise of 84 points.
S&P 500 futures are eyeing a rise of 9 points.
The Nasdaq futures are eyeing a lift of 30 points.
And the ASX200 futures are eyeing a 24 point rise tomorrow morning.

Economic News

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.

Company news

Perenti’s, (ASX:PER) Surface Mining Industry Sector Group (ISG) has secured a further $165 million in new and extended contracts. Part of the contracts include a three-year deal for drill and blast operations at the Middlemount Mine in Queensland, a four-year contract for exploration drilling at various sites of a major coal operator in the Bowen Basin in Queensland. It also includes a six-month contract with Downer for drill and blast operations at the Eliwana Project in the Pilbara, Western Australia.Perenti Managing Director, Mark Norwell, said the additional work demonstrated Perenti’s success in converting pipeline opportunities and extending existing relationships with customers. Shares in Perenti (ASX:PER) closed 0.8 per cent higher at $1.96.

Looking at some more headlines:

The Woolworths Group (ASX:WOW) faces class action over staff underpayment despite a commitment to fully rectify all payment shortfalls.

Sunland Group (ASX:SDG) has entered into a conditional contract to sell the balance of development land at The Heights, Pimpama on the Gold Coast to GemLife.

Cashwerkz (ASX:CWZ) signs an alliance with digital platform, Complii.

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.

Best and worst performers of the day

The best performing sector was Utilities adding 1.1 per cent while the worst performing sector was Energy, shedding 0.5 per cent.

The best performing stock in the S&P/ASX 200 was Silver Lake Resources (ASX:SLR), rising 5 per cent to close at $1.17. Shares in Virgin Money UK (ASX:VUK) and Bega Cheese (ASX:BGA) followed higher.

The worst performing stock in the S&P/ASX 200 was Clinuvel (ASX:CUV), dropping 4.4 per cent to close at $26.87. Shares in Mayne Pharma Group (ASX:MYX) and Jumbo Interactive (ASX:JIN) followed lower.

Asian markets

Japan’s Nikkei rose 1 per cent, Hong Kong’s Hang Seng is 0.4 per cent higher and the Shanghai Composite has added 0.4 per cent.

Commodities and the dollar

Gold is trading at US$1,460 an ounce. 
Iron ore price is 0.7 per cent lower at US$87.46.
Iron ore futures are pointing to a rise of 0.4 per cent.
Light crude is US$2.94 down US$55.17 a barrel.
One Australian dollar is buying 67.76 US cents.