Australia | Oct 31 2012
By Max Ludowici, Equities & Derivatives Advisor, 708 Capital
It was a fairly resilient day on the ASX following strong leads from European markets overnight and news the NYSE will re-open for business tonight. The ASX 200 ((XJO)) closed up 0.7% or 31 points to finish at 4517 points. Strong company earnings and lower Italian and Spanish bold yields helped support European equities and the Euro.
Thankfully Hurricane Sandy appears not to have done as much damage as first feared as it lost most of its fury before hitting land. Interestingly, markets are quite fond of a natural disaster event and rather than focus on the economic cost of the x billion in damage, we focus on the resources, labour and activity needed to clean-up, repair and rebuild. JP Morgan chief equities strategist, Tom Lee, used statistics to last night demonstrate that markets, more often than not, rally after disaster events. Indeed this could prove to be the event we’ve been waiting for to retrace the gap back to the recent highs in the US market.
The Nikkei had a strong day, recovering from its sharp sell-off in the final minutes of trade yesterday, as investors digested news that the Bank of Japan had expanded its asset purchase program to 11 trillion JPY and the Central Bank and Government emphasised their joint ambition to reduce deflation. The Industrial and Commercial Bank of China ICBC (China’s biggest lender by assets) defied expectations of potentially disastrous bank earnings results that had been concerning markets the past week after posting a better than expected profit number. Along with news yesterday that the PBoC would inject liquidity of up to a value of $60 billion USD, investors appear to be regaining confidence about the projected stability of the Asian banking sector.
Back home, September building approvals rose 7.8% from the month prior and 12.4% YoY. Analysts took little confidence from the notoriously lumpy figure and suggested the result was due to structural issues in the Building sector and not a consequence of successive interest rate cuts throughout the year.
DOW futures are relatively flat as we finish up the day, down 6 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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