the asx rebounds in a late afternoon rally 2497972015
Banks under pressure from government’s emphasis on capitalization.
The Australian share market recovered some of its shine on Wednesday in a late session rally that commenced shortly before 1 PM and led the benchmark S&P/ASX 200 index to a close in positive territory.
The rebound was led by the energy and mining sectors though financials continued to sulk under the weight of government pronouncements recommending more rigorous capitalisation of the major banks following the Murray financial services inquiry.
Indices and sectors
The benchmark S&P/ASX 200 rose 12.7 points, or 0.2 per cent, and closed at 5,248.3, while the broader All Ordinaries index was up 14.9 points, or 0.3 per cent, at 5,286.5.
The top gaining sectors included materials (+1.27 per cent), energy (+1.17 per cent), consumer staples (+0.48 per cent), consumer discretionary (+0.35 per cent), telecommunications services (+0.28 per cent) and financials (+0.02 per cent).The main losing sectors were healthcare (-0.68 per cent), real estate investment trusts (-0.61 per cent) and industrials (-0.30 per cent).
Stocks
Both mining and energy sectors rebounded in Wednesday’s trading. BHP Billiton Limited (ASX:BHP) and Rio Tinto Limited (ASX:RIO) jumped over 1 per cent each to AU$24.23 and AU$52.78 respectively. Fortescue Metals Group Limited (ASX:FMG) was up 5.96 per cent to AU$2.49, Atlas Iron Limited (ASX:AGO) rose 6.67 per cent to AU$0.03 and BC Iron Limited (ASX:BCI) surged nearly 19 per cent to AU$0.32. During the quarter ended September, BHP Billiton produced a record 67 million tons of iron ore on the back of the ramp up in its operations at the Jimblebar mining hub, along with productivity improvements at Newman and port facilities, the ABC said.
Uranium miner Paladin Energy Ltd (ASX:PDN) shot up 9.30 per cent to AU$0.235 and was the top gainer on the S&P/ASX 200, while gold miner Northern Star Resources Ltd (ASX:NST) was the second-biggest gainer, up 7.59 per cent to AU$3.12.
In energy, Santos Ltd (ASX:STO) was up 2.84 per cent to AU$5.44, Origin Energy Ltd (ASX:ORG) surged 4.48 per cent to AU$5.60, Woodside Petroleum Limited (ASX:WPL) gained 0.75 per cent to AU$30.70 and Oil Search Limited (ASX:OSH) was up 0.27 per cent to AU$7.32. AWE Limited (ASX:AWE) dipped 4.05 per cent to AU$0.710 and was the second-biggest loser on the S&P/ASX 200.
In consumer stocks, Woolworths Limited (ASX:WOW) and Wesfarmers Ltd (ASX:WES), the owner of supermarket chain Coles, rose about 0.5 per cent each to AU$26.95 and AU$40.70 respectively. Myer Holdings Ltd (ASX:MYR) was up 1.01 per cent to AU$1.00, but Caltex Australia Limited (ASX:CTX) slipped 1.40 per cent. Metcash Limited (ASX:MTS) shot up 1.49 per cent to AU$1.37, despite a report that said the future of many local stores, and their major supplier Metcash, was endangered by the rise of German supermarket giant Aldi.
The big banks put up a mixed show. National Australia Bank Ltd. (ASX:NAB) fell 0.13 per cent to AU$31.72 and Westpac Banking Corp (ASX:WBC) declined 0.32 per cent to AU$30.75. However, Commonwealth Bank of Australia (ASX:CBA) was up 0.11 per cent to AU$75.81 and Australia and New Zealand Banking Group (ASX:ANZ) rose 0.56 per cent to AU$28.56.
Though Telstra Corporation Ltd (ASX:TLS) and M2 Group Ltd (ASX:MTU) gained, TPG Telecom Ltd (ASX:TPM) was down 1.31 per cent to AU$10.51. In healthcare, CSL Limited (ASX:CSL) shed 0.54 per cent to AU$89.52 and Ramsay Health Care Limited (ASX:RHC) slumped 2 per cent to AU$60.32.
Sky Network Television Ltd (ASX:SKT) slumped 11.61 per cent to AU$4.34 after the New Zealand pay-TV operator downgraded its profit forecast for the 2016 financial year. The stock was the top loser on the S&P/ASX 200.
Economic news, currency and market outlook
The Westpac-Melbourne Institute Leading Index, which indicates the likely pace of economic activity three to nine months ahead, improved marginally from -1.14 per cent in August to -0.35 per cent in September. The index has now remained below its long-term average for the last five months and “growth looks a little vulnerable based on this current run of below trend growth rates,” said Westpac chief economist Bill Evans.
Federal opposition leader Bill Shorten will now extend his support to the Free-Trade Agreement with China after negotiating a compromise with the government according to the ABC. "Labor now has achieved what we believe to be satisfactory legal protections," Mr Shorten said.
On Wall Street Wednesday, stocks fell on the back of a near 20 per cent crash in Valeant Pharmaceuticals Intl Inc (NYSE:VRX), fresh weakness in the energy sector in line with crude oil prices and a disappointing earnings report from Yahoo! Inc. (NASDAQ:YHOO). The Dow Jones Industrial Average fell 48.5 points, or 0.28 percent, to 17,168.61, the S&P 500 lost 11.83 points, or 0.58 percent, to 2,018.94 and the Nasdaq Composite dropped 40.86 points, or 0.84 percent, to 4,840.12.
The Australian dollar traded lower in response to weakness in commodity prices. At 7am (AEDT), the currency was trading at 72.11 US cents, down from 72.50 US cents on Wednesday.
The Australian stock market is likely to open lower given that at 06:45 am (AEDT) the December ASX SPI200 Index (AP) Future contract was down 26 points at 5,213.
