Australian Stocks: What Happened Today?

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By Max Ludowici, Equities & Derivatives Advisor, 708 Capital

The scoreboard:

–          The ASX200 finished up 22 points or 0.50% to 4617

–          The AUD is still holding above 1.05. Currently reading 1.0517 vs the USD

–          Strong volumes were felt again today with $4.7B of stock changing hands.

Shares on the ASX performed strongly despite profit in the first part of the session to close the day up 22 points or 0.5% to 4617. Fiscal cliff talks remained in focus as President Obama demonstrated his willingness to compromise on the level of annual income that may be subject to higher taxes. Stocks were unable to match the moves on Wall St however showing that momentum may be slowing coming into the final real week of trade before Christmas and NYE. 

Traders should treat the year end and early January period with extreme caution. We’ve had a great move for the last two weeks and we’re entering a period of very low liquidity as traders and fund managers put their feet up which is likely to increase the potential of more volatile trading, particularly as traders will have built up sufficient long positions to be able to short markets and exacerbate any weakness the light trading may cause. There is also a huge option expiry day tomorrow for both index and stock options and will be the last opportunity for institutions to square and rebalance positions prior to the end of the calendar year.

The gold price got hit overnight and the technical backdrop demonstrates that a further slump is likely. Strong data out of the US and a move toward a fiscal resolution is causing gold to lose its safe haven appeal. Spot gold is currently trading at A$1672, 1.5% lower than yesterday’s open. Though more a reflection of continual production downgrades, Newcrest Mining ((NCM)) has been performing woefully since its peak at $30 just 3 months ago. NCM closed today’s trade down 3% to $22.56

Despite a takeover bid actually crystalising for Billabong ((BBG)) at $1.10, the stock fell over 14% intraday after the company cut its earning guidance. BBG closed the day down 13% to close at $0.85.

Miners continued to rise with BHP Billiton ((BHP)) and Rio Tinto ((RIO)) up 1.1% and 1.5% respectively.

Macquarie Bank ((MQG)) followed the positive moves of US investment banks overnight to post a gain of 2.5% to close at $34.82

DOW futures are pointing to a flat opening inline with last night’s close at 13,276.
 

(For a more comprehensive summary of last night’s market action see FNArena’s Overnight Report.)

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 costconsultation and portfolioreview or to learn more visit www.708capital.com.au. Note: 708 Capital offers wealth management services for Sophisticated and Wholesale Investors only. We can only assist investors who are classified as Sophisticated Investors or have verified assets over AUD$2.5m.

708capital is a holder of AFSL. No. 386279

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This document is intended to provide general securities advice only, and has been prepared without taking account of your objectives, financial situation or needs and therefore before acting on advice contained in this document you should consider its appropriateness having regard to your objectives, financial situation and needs. We recommend you obtain financial, legal and taxation advice before making any financial investment decision.

Disclosure of Interests: 708capital receives commission from dealing in securities and its authorised representatives, or introducers of business, may directly share in this commission. 708capital and its associates may hold shares in the companies recommended.

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