Australia | Oct 30 2012
By Max Ludowici, Equities & Derivatives Advisor, 708 Capital
It was another fairly muted day on the ASX with the broader ASX200 closing up 9 points or 0.2% to finish at 4486 points. Hurricane Sandy kept investors largely sidelined despite the market looking like it had some momentum at various stages throughout the day. Photos of a flooded NYC circulated throughout the day (though a lot of these were thought to be hoaxes) showing cars floating down Wall Street only added to investors’ fears that the US market might be closed beyond Tuesday. The market had some momentum till around 2pm where all sectors fell in unison and it looked likely we’d finish in the red but a resurgence in the defensives kept the market buoyant into the close.
As the entire East Coast of the US was in virtual lockdown, traders sought safety in the safe haven USD whilst Sandy plays out. Adding to the USD strength, Italian ex-PM Berlusconi who was last week convicted of Tax Fraud threatened to pull his party’s support for the Monti-led Government overnight pushing traders out of the EUR and into the USD.
Two successive months of negative home sales data showed the RBA’s attempt to inject confidence in the housing sector with accommodative monetary policy is not yet filtering through the market. September home sales fell another 3.7% after posting a 5.3% decline in August.
On the corporate front: Virgin Australia ((VAH)) announced the sale of a 10% stake to Singapore Airlines via private placement at 42.88c. VAH also announced this morning that it would acquire a 60% stake in the troubled Tiger Airlines as well as a full cash and script takeover of Sky West airlines for $98.7m. VAH closed up 5.4% to 48.5c.
Asian markets were mostly up across the board and did well given the state of affairs across the Pacific.
US futures were down heavily over 100 points for most of the session only to recover slightly in the afternoon. DOW futures are currently down 82 points.
This article produced at the request of and is published by FNArena with the expressed permission of 708 Capital.
708 Capital is a full service stockbroking and investment advisory firm. 708 offers investment and market advice to high-net-worth Private and Institutional clients in Australia and across the globe. 708's extensive network of contacts gives its clients exclusive access to ground-level fundraising opportunities and new company listings in a variety of small and large cap ASX listed companies. 708 has a longstanding track record of generating exceptional returns for its clients. Click here 708capital.com.au/contact-us/ for a no cost consultation and portfolio review or to learn more visit www.708capital.com.au. Note: 708 Capital offers wealth management services for Sophisticated and Wholesale Investors only. Unfortunately we cannot assist investors who aren’t classified as Sophisticated Investors or have verified assets over AUD$2.5m.
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