Five things to watch on the ASX on Monday

Australian Stock Markets

On Friday the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) finished the financial year with a whimper when it gave back its earlier gains to finish the day down 0.3% at 6,194.6 points.

Will the market be able to start the new financial year in style on Monday? Here are five things to watch:

The ASX is expected to open higher.

The local market is expected to open the day higher on Monday. According to the latest SPI futures, the S&P/ASX 200 is poised to open 23 points or 0.4% higher following a positive end to the week on Wall Street.

The Dow Jones Industrial Average finished the week with a 0.2% gain, the S&P 500 was up 0.1%, and the NASDAQ was 0.1% higher.

Oil prices have continued to rise.

Australian energy producers such as Oil Search Limited (ASX: OSH) and Woodside Petroleum Limited (ASX: WPL) could be set for another positive day of trade after the price of U.S. crude settled above US$74.00 for the first time since November 2014.

Prices have been rising after sanctions against Iran threatened to remove a substantial volume of oil from world markets. WTI crude closed up 1% at US$74.15 a barrel and Brent crude was up 2% to US$79.44 a barrel. The latter is closing in on a three and a half year high.

Aluminium prices slide.

According to the London Metal Exchange, the aluminium price dropped lower on Friday. Aluminium closed the week with a 1% decline to US$2,159 a tonne, which could put pressure on the Alumina Limited (ASX: AWC) share price today.

CSL and ResMed rated as buys.

The shares of CSL Limited (ASX: CSL) and ResMed Inc (ASX: RMD) could be on the rise on Monday after they were the subject of positive broker notes out of Goldman Sachs.

The broker has initiated coverage on both companies with buy ratings.

Ramsay Health Care rated as a sell.

Ramsay Health Care Limited (ASX: RHC) shares, on the other hand, could be set for another day in the red after Goldman Sachs initiated coverage on the private hospital operator with a sell rating.

It is concerned that hospitals face industry headwinds which are expected to unwind over several periods.

ASX shares that have charged higher today

Australian Stock Markets

It has been a disappointing day of trade for the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO). In afternoon trade the index is down 0.8% to 6,035 points due largely to declines in the telco and resources sectors.

Four shares that have defied the market and charged higher today are listed below. Here’s why they are on the rise:

The BWX Ltd (ASX: BWX) share price has rocketed 36% higher to $5.98 after its CEO and CFO teamed up with Bain Capital to launch a $6.60 takeover approach for the personal care products company.

Judging by the fact that its share price is still trading at a reasonable discount to the offer price, the market doesn’t appear overly certain on a deal being concluded.

The HT&E Ltd (ASX: HT1) share price has charged 6% higher to $2.42 after the outdoor advertising company announced that APN Outdoor Group Limited (ASX: APO) has offered $500 million to acquire its Adshel business.

APN Outdoor believes Adshel’s Street Furniture business would provide an attractive complement to its existing out-of-home product offering.

The James Hardie Industries plc (ASX: JHX) share price has climbed 4.5% to $23.48 after the release of its fourth quarter and full-year results.

According to the release, James Hardie Industries achieved a 12% increase in adjusted group earnings before interest and tax to US$397.5 million for the 12 months ended March 31 2018.

The building supplies company also provided positive guidance for FY 2019.

The Yojee Ltd (ASX: YOJ) share price has zoomed 26% higher to 14.5 cents after the logistics and supply chain management platform provider signed a services agreement with Schenker (Asia Pacific).

The services agreement will see Schenker (Asia Pacific) pay Yojee a fee to commence a project for the implementation of Yojee’s platform into its ecommerce and last mile operations. While it is a positive, I would suggest investors wait to see how things progress.

ASX shares starting to ride high this week

Australian Stock Markets

In afternoon trade the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) has given back its early gains and has sunk into the red. At the time of writing the benchmark index is down 0.1% to 6,082 points.

Four shares that have not let that hold them back are listed below. Here’s why they have started the week on a high:

The Kidman Resources Ltd (ASX: KDR) share price is up 4.5% to an all-time high of $2.41. Investors continue to fight to get hold of the lithium miner’s shares after it announced an offtake agreement with Tesla, Inc last week.

This led to Ord Minnett slapping a buy rating and $3.20 price target on the company’s shares.

The Livetiles Ltd (ASX: LVT) share price is 8% higher to 41.5 cents following the release of a positive broker note out of Citi.

According to the note, the broker has initiated coverage of the technology company with a (high risk) buy rating and 56 cents price target. The broker suspects that the strategic relationship with key Microsoft and marketing vendor N3 could prove to be material.

The Vocus Group Ltd (ASX: VOC) share price has surged 6% higher to $2.51 after the embattled telco company announced the appointment of Kevin Russell as its group managing director and CEO.

Mr Russell has worked in the telco industry for over 20 years and held executive roles at both Telstra Corporation Ltd (ASX: TLS) and Optus. He also oversaw the turnaround of Hutchison 3G UK Holdings Limited.

The WiseTech Global Ltd (ASX: WTC) share price has risen 4.5% to $14.44 after the logistics platform provider announced the issue of approximately $100 million worth of shares to a single global institutional investor. Capital Group’s SmallCap World Fund picked up 7,560,153 ordinary shares at a price of $13.30 per share.

Management believes that the issue will support the company’s future growth and I agree. So too does the market judging by its share price rise today.

Things to watch on the ASX on Friday

Australian Stock Markets

On Thursday the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) dropped lower and finished the day down 0.2% to 6,094.3 points.

Will the benchmark index be able to bounce back on Friday and finish on a high? Here are five things that could shape the day’s trade:


ASX futures are pointing higher.
According to the latest SPI futures, the Australian share market is expected to open the day 0.2% or 14 points higher. This comes despite weakness on Wall Street overnight which saw the Dow Jones Industrial Average fall 0.2%, the S&P 500 decline 0.1%, and the NASDAQ drop 0.2%. Trade fears weighed on investor sentiment in the United States.

Oil prices continue to rise.
The Brent crude oil price broke through the US$80 a barrel mark overnight. It has since dropped back a touch but, according to Bloomberg, sits higher by 0.3% at $79.50 a barrel. The WTI crude oil price is up 0.1% to US$71.58 a barrel. This could put BHP Billiton Limited (ASX: BHP) and Oil Search Limited (ASX: OSH) in a position to have a solid finish to the week.

Australia's Westpac hires complaints head amid damaging inquiryAustralia’s biggest money managers have seen their shares pounded by a barrage of damaging allegations since February, when a Royal Commission inquiry began exposing their abuse of market power and contempt of customers. The bank promoted its corporate affairs manager, Carolyn McCann, to a new role of “group executive, customer and corporate relations”, a move it said would ensure any customer issues “stay front and center” at the bank.

ANZ sells stake in Cambodian joint venture.
After the market closed on Thursday Australia and New Zealand Banking Group (ASX: ANZ) announced the sale of its 55% stake in Cambodian JV ANZ Royal Bank to Japan’s J Trust. The proceeds inclusive of transaction costs, taxes and the release of accumulated foreign currency translation reserves equates to a circa $30 million loss on sale completion for ANZ.

Treasury Wine Estates will be on watch.
The shares of Treasury Wine Estates Ltd (ASX: TWE) will be on watch on Friday after heavy declines on Thursday. Reports in the AFR of a supply glut in China weighed heavily on the wine company’s share price. Management has refuted the claims, but the media outlet has stated that short sellers aren’t convinced. Though it is worth pointing out that only a paltry 0.8% of the wine company’s shares were held short at the last count.

Things to watch on the ASX on Tuesday

Australian Stock Markets

Will the market be able to build on this on Monday's solid start to the week? Here are five things that could shape the day’s trade:

On Monday the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) had a solid start to the week and finished the day 0.3% higher at 6,135.3 points.

ASX futures are pointing higher again.

According to the latest SPI futures, the Australian share market is expected to open the day 2 points higher following a mixed night of trade in U.S. markets. The Dow Jones ended the day 0.3% higher, the S&P 500 was up 0.1%, and the Nasdaq ended 0.1% higher.

Oil prices rebound.
Energy producers BHP Billiton Limited (ASX: BHP) and Woodside Petroleum Limited (ASX: WPL) will be on watch after oil prices rebounded strongly after a spot of weakness. According to Bloomberg, WTI crude oil climbed 0.6% to US$71.11 a barrel and Brent crude oil rose 1.7% to US$78.43 a barrel. Overnight OPEC lifted its forecast for global oil demand growth this year.

Reserve Bank minutes.
The minutes from the latest Reserve Bank of Australia meeting will be released later this morning. Although there is unlikely to be any bombshells in the minutes, the market will be looking out for any change in rhetoric around Australian wage growth. In addition to this, deputy governor Guy Debelle is due to give a speech this morning.

NAB shares go ex-dividend.
The shares of National Australia Bank Ltd (ASX: NAB) are likely to sink into the red this morning after going ex-dividend for the bank’s 99 cents per share fully franked interim dividend. Eligible shareholders will receive this dividend in their nominated account on July 5. Eligible shareholders of Premier Investments Limited (ASX: PMV) are due to be paid the retail conglomerate’s interim dividend today.

Telstra shares will be on watch.
Telco giant Telstra Corporation Ltd (ASX: TLS) will be on watch on Tuesday after Monday’s 5% slide. According to a note out of Goldman Sachs, the broker has reduced its earnings forecasts in light of yesterday’s update but still sees a lot of value in the company’s shares. It has a buy rating and reduced price target of $3.90 on its shares.

ASX shares ending the week on a high

Australian Stock Markets

The benchmark S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) is on course to have a strong finish to the week. At the time of writing the index is up 0.3% to 5,927.2 points.

Four shares that are climbing more than most today are listed below. Here’s why they are ending the week on a high:

The iSelect Ltd (ASX: ISU) share price has rebounded slightly and pushed 6% higher to 50 cents today. The price comparison company’s shares have been crushed this week after a trading update revealed a sizeable revision to its full-year earnings guidance.

However, news that one of its directors has been buying shares on-market appears to have helped with investor sentiment.

The Nanosonics Ltd. (ASX: NAN) share price has stormed 10.5% higher to $2.50 after the infection control specialist revealed that its second generation trophon platform device has been granted clearance by the FDA.

If all goes to plan, management expects the commercial release of the new trophon2 product in the USA will take place during the first quarter of the 2019 financial year. Nanosonics has been experiencing high levels of short interest lately, which I suspect could have led to a short squeeze today.

The Nextdc Ltd (ASX: NXT) share price is up over 2% to $6.79. The data centre operator’s shares were given a boost today after global tech giants Amazon and Microsoft both reported surging revenues from their cloud hosting businesses.

This could be interpreted as a sign that demand for NEXTDC’s services is also booming. As I said earlier, I think it would be a great buy and hold investment option.

The ResMed Inc. (ASX: RMD) share price has climbed 2.5% higher to $12.97 after the release of its third-quarter results. According to the release, the sleep treatment company delivered an adjusted profit of US$132.5 million on revenues of US$591.6 million for the quarter ending March 31 2018.

This was an increase of 32% and 15%, respectively, on the prior corresponding period. Like NEXTDC, I think ResMed would be another quality buy and hold investment.

Asian Markets Carve Out Gains Ahead Of U.S. Inflation Report

Asian Stock Markets

Investors in Asia-Pacific stock markets began shaking off their earlier caution ahead of the latest U.S. reading on inflation, which is likely to give some idea about whether the Federal Reserve will accelerate its pace of interest-rate increases. 

Nikkei closes up 0.6% as yen gains ease slightly

Shares across the region started to eke out gains in the afternoon or pare losses after a subdued start, following overnight falls in heavyweight U.S. industrials.

Recent inflation reports from the U.S. have been sources of volatility in markets as investors try to guess the trajectory of Fed policy tightening.

Japanese stocks closed up 0.6%, after posting losses most of the morning. Gains in the yen eased a touch as investors took a largely sanguine view of continuing calls for the resignation of Finance Minister Taro Aso over his ministry's involvement in altering documents in a controversial land sale. The buyer of the land was a private-school operator allegedly tied to Prime Minister Shinzo Abe's wife.

Tech stocks logged gains after Nasdaq's record close overnight, its second in a row. Samsung Electronics (005930.SE) was up 2.5% in Seoul, helping push up the Kospi 0.2%, while Taiwan's Taiex benchmark gained 0.9%, buoyed by gains of 2% or more for Apple suppliers Largan Precision (3008.TW) and Taiwan Semiconductor (2330.TW) .

Tencent (0700.HK) was up a fraction after earlier falls, helping limit losses on the Hang Seng Index in Hong Kong (0700.HK) .

On mainland China, Shanghai stocks were down 0.3% after news the country plans to merge its banking and insurance regulators. Beijing has previously tightened the screws on stock-market investing by companies in these two sectors. Stocks in Shenzhen were largely flat after regaining ground from a weak start.

Australia's S&P/ASX 200 slipped led regional declines, falling 0.4% on weakness in major mining and oil stocks. BHP Billiton (BHP.AU) (BLT.LN) (BHP.AU) and Rio Tinto (RIO) (RIO) (RIO) were down 0.8% and 2.0% respectively, while Woodside fell 0.3% after Monday's fresh drop in oil prices. Banks also took a hit from the start of an inquiry into financial industry misconduct.

Commodity prices were lower, with oil futures down 0.3%. In Hong Kong, Chinese oil explorer and producer Cnooc (0883.HK) was down 2.4%.

New Zealand stocks traded higher throughout the day with the NZX 50 ending at a second-straight record close.

S&P futures were up 0.05%, suggesting a muted start also for U.S. stocks.

NZ shares: MetroGlass sinks to record low

New Zealand Stock Markets

New Zealand shares fell as Metro Performance Glass sank to a record low on speculation it may drop out of the S&P/NZX 50 Index. Fisher & Paykel Healthcare, Fletcher Building and a2 Milk were among decliners while Kathmandu and Z Energy rose.

The NZX 50 fell 43.32 points, or 0.5 percent, to 8,284.34. Within the index, 24 stocks declined, 17 rose and nine were unchanged. Turnover was $184 million.

MetroGlass dropped 2.5 percent to 79 cents, a record low close. They sold in the 2014 IPO for $1.70 a share, allowing private equity owners Crescent Capital and Anchorage Capital to reap about $230 million selling down their holdings.

Like Fletcher and Steel & Tube, MetroGlass has grappled with capacity constraints in the construction industry, which has squeezed margins.

In October it announced a strategic review after a series of guidance downgrades and chief executive Nigel Rigby stepped down in December. March quarter reweightings for the NZX 50 may be announced as soon as this week.

Fletcher dropped 1.8 percent to $6.49 although Ward said chief executive Ross Taylor "has been talking a very credible story" about trying to ringfence losses at the company's B+I unit while completing a strategic review of the whole group.

Steel & Tube declined 0.5 percent to $2.08.

A2 fell 1.5 percent to $12.56, having soared 58 percent this year. Ward said it has continued to drift after its "extreme run" and also on news that management had been selling shares.

Synlait Milk decreased 0.1 percent to $7.49 and honey products exporter Comvita fell 1.3 percent to $7.40.

Westpac Banking Corp declined 2 percent to $31.95 and Australia & New Zealand Banking Group fell 1.9 percent to $30.13, reflecting the lenders' weaker stock across the Tasman.

F&P Healthcare fell 3.3 percent to $13.25 and Ryman Healthcare fell about 1 percent to $10.40. Kathmandu rose 2.7 percent to $2.28 and Z Energy rose 1.7 percent to $7.

Marsden Maritime Holdings was unchanged at $5.60 after chief executive Graham Wallace said he will leave the company at the end of this month.

NZX: New Zealand Shares rises for fifth day

New Zealand Stock Markets

New Zealand shares rose for a fifth day, following overseas markets higher, led by Synlait Milk after the milk processor bought a plot in Waikato for a new manufacturing facility. Spark New Zealand, Fletcher Building, and Air New Zealand all gained. 

The S&P/NZX 50 index increased 19.85 points, or 0.2 percent, to 8,360.38. Within the index, 24 stocks rose, 15 fell, and 11 were unchanged. Turnover was $128 million.

Stocks across Asia followed Wall Street higher as investors around the world await testimony by Federal Reserve chair Jerome Powell for insights into the central bank's view on US interest rates. Investors have already pared back expectations for more aggressive hikes this year, making equity markets more attractive.

New Zealand's market is also nearing the end of what's been a positive corporate reporting season, with most companies meeting expectations, meaning the historical price-to-earnings ratio of 18.5 isn't stretched. That compares to Australia's S&P/ASX 200 index's PE of 16 and Wall Street's S&P 500 index's PE of 23.2.


Synlait led the local bourse higher, gaining 3.3 percent to $7.15 after the company said it bought a site in Pokeno where it planned to build a second drying facility, spreading its geographic supply base and expanding processing capacity to meet growing demand for infant formula. A2 Milk Co, which has a long-running relationship with Synlait, gained 0.4 percent to $13.10, while Fonterra Shareholders Fund units decreased 0.2 percent to $6.07.

Spark rose 2 percent to $3.395, Fletcher Building gained 1.5 percent to $6.63 and Air NZ advanced 2.6 percent to $3.17.

The dual-listed Australian banks gained, with Australia & New Zealand Banking Group up 1.2 percent to $31.30 and Westpac Banking Corp rising 1.8 percent to $33.76. Locally listed lender Heartland Bank was unchanged at $1.82.

New Zealand Refining rose 0.4 percent to $2.39 after chief executive Sjoerd Post said he will leave the company at the end of July, ending five years in charge of the country's only refinery operator. Transport fuels firm Z Energy fell 1 percent to $7.13.

Mercury NZ slipped 0.3 percent to $3.21 after the electricity generator-retailer reported record first-half earnings before interest, tax, depreciation and amortisation of $301 million as favourable rainfall flooded its North Island hydro schemes. Trustpower, which also has exposure to North Island hydro generation, gained 1.6 percent to $5.20. South Island generator Meridian Energy fell 1.6 percent to $2.805, while Contact Energy rose 0.2 percent to $5.26. Genesis Energy rose 0.6 percent to $2.35.
Vital Healthcare Property Trust gained 0.5 percent to $2.10 after reporting a 2.7 percent decline in first-half earnings as the hospital owner and developer's management fees rose on the company's biggest property portfolio.

Outside the benchmark index, PGG Wrightson was unchanged at 61 cents after first half earnings beat expectations, New Zealand Oil & Gas was unchanged at 68 cents in reporting a narrower first-half loss having overhauled its portfolio, while NZAX-listed Foley Family Wines was unchanged at $1.51 when the winemaker returned to first half profit on a 21 percent gain in revenue.

Veritas Investments shares were unchanged at 5 cents after the food and beverage investor said it was considering a sale or merger of its profitable Better Bar Co unit when reporting first-half earnings.
Rakon was unchanged at 20 cents after saying it was in talks to buy out its senior partner in an Indian joint venture for US$5.5 million, having written down the value of its investment in the entity last year.

Among companies reporting tomorrow, Precinct Properties was unchanged at $1.26, Scales Corp slipped 0.7 percent to $4.54, Sky Network Television was unchanged at $2.80, Trade Me fell 1.4 percent to $4.30, Vector rose 1.5 percent to $3.30, Vista Group International gained 1.2 percent to $2.55, and Wellington Drive Technologies gained 6.3 percent to 17 cents.

ASX: Banks, Energy push up ASX market

Australian Stock Markets

The Australian share market at noon is still trading above 6,000 points, after US markets and global oil prices lifted.

The benchmark index is above 6,000 points for the first time since February 5 as Wall Street's rally on easing concerns about US interest rate hikes buoyed local investors.

Investors also responded positively to a generally good company earnings season.

Global oil prices jumped to a two-week-plus after an oilfield in Libya shut down and after Saudi Arabia - the Organisation of the Petroleum Exporting Countries' largest oil producer - said OPEC's efforts to cut stockpiles were working.

On the local bourse, in the energy sector, Woodside Petroleum lifted 1.4 per cent to $28.97 and Oil Search added 0.3 per cent to $7.58, but Santos was down 1.0 per cent at $5.07.

The big four banks were all higher, with ANZ and Westpac the best performers, both 0.9 per cent stronger, while National Australia Bank rose 0.8 per cent and Commonwealth Bank added 0.6 per cent.

Among the major miners, both BHP Billiton and Rio Tinto were off 0.4 per cent while Fortescue Metals was 0.3 per cent higher.

Gold miner Newcrest was down 0.8 per cent to $21.94 after it agreed to buy a 27.1 per cent stake in Toronto-listed Lundin Gold for $US250 million ($A318.8 million).

Among companies reporting earnings on Monday: BlueScope Steel gained 4.0 per cent to $16.115 after it improved its first-half net profit by 23 per cent to $441.2 million, helped by the restatement of deferred tax liabilities after January's cut in US corporate tax rates.

QBE lost 3.0 per cent to $10.405 after the Insurance giant reported a previously flagged full-year loss of $US1.25 billion ($A1.6 billion), due to one-off costs and blowouts associated with wildfires in California and Hurricane Maria in the Caribbean.

Amaysim dropped 5.2 per cent to $1.445 after the telecommunications and retail energy provider reported a first-half net loss of $2.37 million, down from an $8.3 million profit a year earlier.

Theme parks and entertainment centres operator Ardent Leisure lifted 3.7 per cent to $1.955 after it said it expects to trade profitably in the financial year's second half as attendances improve at the Dreamworld theme park on the Gold Coast.


Meanwhile, the Australian dollar has risen against the US dollar as risk appetite for the Aussie returned.

QBE reports record $1.3 bln loss and said it would exit Latin America to focus on its struggling units in Asia Pacific and North America, as it confirmed a record annual loss hurt by claims from natural disasters.

Why these 4 ASX shares are ending the week with a bang

Australian Stock Markets

The S&P/ASX 200 (Index: AXJO) (ASX: XJO) is on course to finish the week on a high and is up a solid 0.8% to 5,997 points.

Four shares that are climbing more than most today are listed below. Here’s why they are ending the week with a bang:

The Accent Group Ltd (ASX: AX1) share price is up 16% to $1.03 following the release of the footwear retailer’s half-year results.

Accent reported an underlying net profit of $26.3 million on sales of $350.3 million for the six months ended December 31.

This was a 13% and 16.5% increase, respectively, on the prior corresponding period.

The Bellamy’s Australia Ltd (ASX: BAL) share price has jumped 7.5% to $16.03.

With no news out of the infant formula company, today’s gain is likely to be attributable to a broker note out of Goldman Sachs.

The broker upgraded Bellamy’s shares to a buy rating with an increased price target of $18.00 on the belief that its gross margin expansion opportunity is underappreciated by the market.

The Mayne Pharma Group Ltd (ASX: MYX) share price has climbed 6% to 74 cents.

Although the pharmaceutical company posted a net loss of $174 million for the first-half, investors appear to be optimistic that it is now through the worst of its problems.

Management advised that the generic drugs market has stabilised and expects a much stronger second-half.

The Nextdc Ltd (ASX: NXT) share price has rocketed 15.5% to $7.03 following the release of its half-year results.

The data centre operator delivered another impressive half-year result thanks to increasing demand for its services.

This led to management upgrading its full-year guidance.

Furthermore, it advised that it is in advanced negotiations with several large customer opportunities which have the potential to lead to a significant increase in the company’s contracted utilisation base.

NZ shares gain as investors take a2 above $9 bln, Air NZ climbs

New Zealand Share Markets

New Zealand shares rose, led higher by another strong day for a2 Milk Co after signing a supply deal with Fonterra Cooperative Group, while Air New Zealand gained on a higher interim dividend.

Tourism Holdings fell despite beating earnings expectations.

The S&P/NZX 50 index increased 66.61 points, or 0.8 percent, to 8,266.88.

Within the index, 17 stocks gained, 29 fell, and four were unchanged.

Turnover was $229 million.

A2 Milk led the benchmark index higher, rising 9.8 percent to $12.90 as investors continued to rally behind the milk marketing firm after stitching up a supply arrangement with Fonterra and reporting stronger first-half earnings than anticipated.

The company's market capitalisation rose above $10 billion during the day, placing a bigger value on it than Fonterra's $9.77 billion, although at the end of  trading a2 was worth $9.42 billion.


Fonterra Shareholders' Fund units rose 1.2 percent to $6.10, while a2's existing supplier Synlait Milk gained 1.5 percent to $6.75, recovering some of yesterday's selloff over the new arrangement.

Air NZ rose 1.2 percent to $3 after the national carrier lifted its interim dividend, despite posting a 7.4 percent decline in first-half earnings over rising fuel costs.

Fletcher Building gained 1.7 percent to $6.50, recovering from a five-year low after yesterday's earnings result portrayed a soggy outlook for the construction firm's other units.

SkyCity Entertainment Group, which is facing off with Fletcher over the escalating cost of building the Auckland international convention centre, fell 4 percent to $3.87, the biggest decline on the benchmark index.

Tourism Holdings fell 2 percent to $5.92, despite doubling first-half profit on its North American expansion and lower US tax bill.

Chorus fell 2.6 percent to $3.79 ahead of its Monday first-half report, which Forsyth Barr analysts predict will show declining earnings on connection losses.

The network operator's biggest customer, Spark New Zealand, has been migrating customers on to alternative wireless and fibre networks in an effort to reduce its wholesale costs.

Spark shares rose 0.8 percent to $3.345.

Among companies reporting tomorrow, Port of Tauranga fell 0.4 percent to $4.99, Comvita was unchanged at $8.38, Steel & Tube fell 1.4 percent to $2.06, Delegat Group gained 1.5 percent to $7.62, and Summerset Group slipped 0.2 percent to $5.81.

Outside the benchmark index, NZME increased 1.3 percent to 77 cents after the newspaper publisher and radio station owner reported a smaller decline in annual earnings than anticipated, maintaining its final dividend against expectations.

Dual-listed Michael Hill International was unchanged at $1.16 after reported a 66 percent slump in first-half profit on impairment charges over its US exit and overhauling its Emma & Roe range.

Allied Farmers was unchanged at 10.2 cents after the rural services firm reported a 71 percent slide in first-half profit and warned dairy herd sales may remain slow for the rest of the year.

TeamTalk rose 1.1 percent to 95 cents after the telecommunications minnow lifted first-half profit 59 percent after shedding the burden of its unprofitable Farmside rural broadband business.

Tegel Group fell 1 percent after warning annual profit may fall by as much as $2 million from disruptions at its New Plymouth plant from ex-cyclone Gita.

Why these 4 ASX shares climbed higher today

Australian Stock Markets

In afternoon trade the S&P/ASX 200 (Index: AXJO) (ASX: XJO) has followed international markets higher and is up a solid 0.9% to 5,893 points. 

 Four shares that have climbed more than most today are listed below. Here’s why they have climbed higher:

The BHP Billiton Limited (ASX: BHP) share price has stormed 3.5% higher to $31.09 after economic data in the United States led to a strong rally in base metal prices.

It isn’t just BHP climbing higher, either. The mining sector as a whole is up a solid 2.5% today with gains being seen across all industries.

With the outlook for the global economy looking strong, I think BHP Billiton would be a great buy.

The Breville Group Ltd (ASX: BRG) share price is up 5% to $12.87 after the appliance manufacturer posted a 7.8% increase in first-half profit to $36.3 million.

Profits would have been higher had the company not been negatively impacted by changes to federal corporate tax rates in the United States.

Excluding this, net profit would have increased 12.4% in the prior corresponding period.

The Evolution Mining Ltd (ASX: EVN) share price is up 2.5% to $2.87 following the release of the gold miner’s half-year results.

Although Evolution posted a 10% decline in first-half profit to $122.5 million, this was due to a one-off $30.9 million gain in the prior corresponding period.

Evolution finished the period with an AISC of A$785 per ounce, leading to a healthy A$628 AISC margin per ounce.

If I were bullish on the gold price I would be a buyer of Evolution shares.

The Integrated Research Limited (ASX: IRI) share price has climbed 4.5% to $3.80.

This morning the leading global provider of proactive performance management software reported a 20% increase in net profit after tax to $9.3 million.

I think the company is one of the most underrated tech shares on the local market and well worth getting better acquainted with.

As well as Integrated Research, I think these exciting growth shares have enormous potential and are well worth buying today.

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Dow futures signal another bumpy ride on Wall Street

Global Stock Markets

Wall Street could be in store for another bumpy ride.

Dow futures dropped about 150 points on Wednesday morning as the volatility that has rocked markets for more than a week lingers. The premarket losses signal a decline of about 200 points at the open. 

The mood has calmed down a bit though after Wall Street staged a dramatic turnaround on Tuesday. After sinking 567 points early in the day and stumbling into correction territory, the Dow ended the day with a mirror image gain of 567 points. 

The powerful bounce has given hope to the bulls that the market has begun to find a bottom after a period of extreme selling in recent days.  

Overseas markets have mostly calmed down after plunging earlier this week. Asian stocks closed mixed overnight, while European indexes are mostly higher

.

The question now is whether "this draws a line under the recent stock market correction or whether this is merely a dead cat bounce," analysts wrote. 

Despite the market slump, analysts believe the fundamental backdrop looks solid. Corporate earnings have never been higher and U.S. and global economic growth has gained steam. 

Investors will keep a close eye on the bond market. Heavy selling in the U.S. Treasury market caused the 10-year yield to spike to 2.85% last week, worrying Wall Street about inflation and faster rate hikes from the Federal Reserve. Higher bond yields also make stocks look less attractive by comparison. 

The 10-year Treasury yield has receded in recent days and is trading around 2.77% on Wednesday.

Jittery world stocks clamber off two-month lows

Global Stock Markets

World stocks clawed their way back from two-month lows on Wednesday, though momentum was weak and U.S. futures suggested Wall Street could lapse back into losses after rebounding from the biggest selloff in six years. 

European shares opened firmer after plumbing six-month depths on Tuesday, the tail-end of a selloff induced by a volatility spike that took Wall Street’s fear gauge, the VIX index, as high as 50, more than three times its closing level last Thursday.

That rout had wiped $4 trillion off world equities and sent investors scurrying for the safety of German and U.S. bonds, briefly reversing the steady rise in global yields.

MSCI’s all-country index, however, was up 0.25 percent after four days in the red, boosted by gains in Europe, Japan and emerging markets.

As calm returned, bond buying by panicky investors also abated and yields on “safe” German, Japanese and U.S. debt edged up, resuming the trend of recent weeks as markets price further U.S. rate rises and the withdrawal of stimulus in Europe.

Yields on Germany’s 10-year government bond, the euro zone benchmark, were around 0.69 percent, having plunged to 0.66 percent on Tuesday..

Markets are also on edge over U.S. lawmakers’ wrangling to extend the so-called debt ceiling - funding for the U.S. government runs out on Feb. 8 unless a stopgap bill manages to pass the Senate later on Wednesday.
U.S. 10-year yields rose back as high as 2.80 percent after approaching two-week lows around 2.65 percent on Tuesday.

 

With the pivotal gauge of S&P 500 volatility, the VIX, opening at a relatively elevated 31 percent, equity markets are not out of the woods, especially in the United States. 

European shares were positioned for a strong session after seven days of losses, with a pan-European index up 0.7 percent thanks also to a series of robust company earnings reports.

German shares rose 0.6 percent, adding gains after news of a government coalition deal, with Social

Democrats likely taking the key finance portfolio. Southern European bonds, generally seen as riskier assets, also rallied, with yields on Italian, Spanish and Portuguese debt down 5-8 basis points.

MSCI’s emerging equity index was modestly firmer, and unlike most other indexes it has clung to slender year-to-date gains.

On currency markets, which too stayed relatively calm through the rout, the dollar rose slightly against a basket of currencies but fell half a percent to the yen.
Sterling meanwhile was down for the fourth straight day against the dollar, hurt by recent surveys confirming the economy’s fragile state and fresh tensions over Britain’s divorce negotiations with the European Union.

Investors are awaiting Thursday’s Bank of England meeting which should provide an update on authorities’ views on the economy and timing of the next interest rate rise.

Earlier in the day, China’s yuan rose 0.4 percent to the highest since August 2015 when authorities conducted a one-off devaluation.

NZ shares rise; NZ dollar heads for 0.4% weekly gain as payrolls comes into view

New Zealand Stock Markets

New Zealand shares gained, led by Air New Zealand and Fletcher Building, with Z Energy and CBL dropping.

The S&P/NZX50 Index rose 31.42 points, or 0.4 percent, to 8,415.29. Within the index, 23 stocks rose, 17 fell and 10 were unchanged. Turnover was $168 million.

Air New Zealand led the index, up 2.6 percent to $3.13. This week the airline posted December operating figures, showing gains in passengers and revenue passenger kilometres.

Fletcher Building rose 2.1 percent to $7.96, Mainfreight gained 1.5 percent to $26.40, and Tourism Holdings jumped 1.4 percent to $5.84.

Z Energy was the worst performer, down 2.1 percent to $7.41, weakening off throughout the day following a significant line of stock changing hands at $7.45 before the market opened.

Infratil dropped 1.4 percent to $3.17 and Metro Performance Glass fell 1.1 percent to 93 cents.
CBL declined 0.9 percent to $3.17 before being put in a trading halt ahead of an earnings update on Monday.

Outside the benchmark index, Briscoe Group gained 2.9 percent to $3.50. It says full-year sales topped $600 million for the first time, helped by stronger revenue from sporting goods in the fourth quarter, and it expects to report a record annual profit of about $61 million.

Total sales rose 2.6 percent to about $194 million in the 13 weeks ended Jan. 28. Homeware sales climbed 1.3 percent to $124.8 million, although on a same-store basis they were down 0.3 percent, while sporting goods sales rose 5.1 percent to $69 million, or a 4.9 percent same-store gain.

The New Zealand dollar is heading for a 0.4 percent weekly gain against the greenback, which is trading around its lowest levels in more than three years against a basket of currencies.

The kiwi traded at 73.63 US cents as at 5pm in Wellington from 73.66 cents late yesterday and from 73.37 cents a weak ago. The trade-weighted index was at 74.99 from 74.96 late yesterday.

The Reserve Bank is scheduled to release its monetary policy statement next Thursday.

No change is expected to the official cash rate, now 1.75 percent, although inflation has printed weaker than its most recent projections back in November, the trade-weighted index is stronger, and historical gross domestic product data has been revised up.

The kiwi didn't move much after reports showed a pickup in consumer confidence in January, an increase in December home-building consents and a slight dip in annual net migration from near record levels.

New Zealand's two-year swap rate was unchanged at 2.16 percent, while 10-year swaps rose 3 basis points to 3.27 percent.

MARKET CLOSE: NZ shares rise in light trading

New Zealand Stock Markets

New Zealand shares gained, led higher by Fisher & Paykel Healthcare Corp and Kathmandu Holdings in quiet trading due to the Auckland Anniversary Day.

The S&P/NZX50 Index gained 16.17 points, or 0.2 percent, to 8,237.59. Within the index, 21 stocks rose, 20 fell and nine were unchanged. Turnover was $72.5 million.

F&P Healthcare led the index higher, up 2.7 percent to $13.25. Kathmandu gained 2.5 percent to $2.44 and Australia & New Zealand Banking Group rose 1.8 percent to $31.55.
Trustpower rose 0.5 percent to $5.60. The stock lost 6 percent over Thursday and Friday after cornerstone shareholder Tauranga Energy Consumer Trust proposed it ditch customer rebates in five years in favour of funding community projects.

TECT only pays the dividend of $400 to $500 a year to Trustpower customers in Tauranga, allowing it to dominate the local market.

Auckland International Airport was the worst performer, down 2.2 percent to $6.56, with Trade Me Group dropping 1.5 percent to $7.60. 

Synlait Milk fell 1.8 percent to $6.97. The NZX-listed milk processor said it expects to achieve its forecast milk price payout to farmers so long as commodity prices continue to firm for the remainder of the season.

The dairy company reaffirmed its forecast milk price of $6.50 per kilogram of milk solids for the 2017/18 season which runs from June 1 to May 31.

However, the company signalled in a statement to the NZX that this forecast is dependent on commodity prices continuing to firm for the rest of the season.

Its forecast compares with Fonterra Cooperative Group's expectation of $6.40/kgMS for the current season.

Dow is coming off an annual gain of 25% — here’s what typically happens next

Global Stock Markets

Welcome to the first trading day of the new year. It’s just one session and won’t set the tone for 2018, right?

LPL Financial stat-slinger Ryan Detrick suggests today might matter more than you might expect.
In the past 20 first sessions of the year, the S&P 500 has closed higher on 10 occasions, he notes in a tweet.

Full-year return if up the first day? +14.2%, Detrick says. Full-year return if down the first day? -0.6%.”

The LPL strategist also serves up our call of the day, with this advice for investors: “Don’t turn bearish simply because ’17 was up a lot.”

The Dow Jones Industrial Average gained 25% last year, marking the 10th time since 1950 that it scored an annual advance of that magnitude or more.

What typically has happened after such banner years? The Dow has been higher in the next year on eight occasions — posting a double-digit percentage rise six times, Detrick says.

The average next-year jump has been 12.6%, topping the 8.5% bump that you get on average overall. And it’s that factoid that has the LPL strategist advising against getting gloomy solely because of 2017’s huge advance.

Skeptics here and there have taken shots at Detrick’s bullish take, noting valuations appear mighty stretched this time around.

Plus, the list of worries for the stock market looks big and fat, like any investors who gorged themselves over the holidays.

NZ shares up in very quiet pre-Christmas trading

New Zealand Stock Markets

New Zealand shares traded quietly in a truncated final session before Christmas, rising in light volume.

The S&P/NZX50 Index rose 31.99 points, or 0.4 per cent, to 8396.43.

Within the S&P/NZX50 Index, 30 shares gained, 11 fell and 9 were unchanged. Turnover was $46 million.

Trading was shortened by four hours on Friday with the market closing at 1pm and settling at 1.30pm.

Hamilton Hindin Greene investment advisor James Smalley said trading was "as you'd expect - pretty quiet and lacklustre at the moment".

Tourism Holdings led the index higher, up 2.7 per cent to $5.65, while Kiwi Property Group was the worst performer, dropping 1.8 per cent to $1.38.

Speaking ahead of the Australian market opening at midday, Mr Smalley said the local index may see volumes rise when the ASX began trading but as there was only an hour of overlap, he didn't expect volumes to increase significantly.

Meridian Energy dipped 0.3 per cent to $2.93.

It has agreed to buy Trustpower's Australian hydro-electric generation assets, which it says will support an expanding retail business across the Tasman.

Outside the benchmark index, Smiths City Group dropped 1.7 per cent to 58 cents.

It posted a 5 per cent fall in revenue and only just broke even in the first half of the 2018 financial year as economic concerns weighed on consumer appetites.

Revenue dropped to $108.6m from $113.9m in the six months to October 31, with profit at just $2000, compared to $1.5m a year earlier.

NZ shares down on Kathmandu, Fisher & Paykel results while A2 gains

New Zealand Stock Markets

New Zealand shares dropped, led lower by Kathmandu Holdings and Fisher & Paykel Healthcare following trading updates, while A2 Milk Co met investor hopes at its annual meeting today.

The S&P/NZX50 Index fell 1.32 points, or 0.01 percent, to 8,088.48. Within the index, 25 stocks fell, 19 rose and six were unchanged. Turnover was $182.7 million.

Kathmandu Holdings led the index lower, down 4.6 percent to $2.48. The outdoor equipment retailer, set to hold its annual meeting on Friday, said its first-quarter earnings were up despite sales dipping as it widened margins by selling less sale stock.

In the 16 weeks to Nov. 19, group sales rose 0.6 percent at constant exchange rates. In Australia, its largest market, same-store sales grew 2.9 percent in the quarter while they dropped 10 percent in New Zealand. Gross margin expanded 240 basis points, or 2.4 percentage points, with the level of clearance stock about 40 percent lower than a year earlier, it said.

Fisher & Paykel Healthcare dropped 4.5 percent to $13.25. New Zealand's biggest listed company increased first-half profit 4 percent  to $81.3 million, widened its margins, and lifted its forecast for full-year earnings to the top end of its range.

The latest earnings included $12.2 million of patent litigation costs over disputes with rival Resmed compared with $2.4 million of costs a year earlier, and excluding those, profit would have risen 13 percent, it said. First-half revenue lifted 8 percent to $458.4 million. The company had forecast first-half revenue of about $460 million and profit of about $80 million.

A2 Milk Co was the best performer, up 5.4 percent to $8.26. The milk marketer said both revenue and net profit jumped in the first four months of the current financial year as it continues to benefit from strong demand for its infant formula. 

Restaurant Brands rose 2.7 percent to $6.82 and Metro Performance Glass advanced 2.2 percent to 94 cents.


Arvida Group gained 0.9 percent to $1.18. The retirement village company reported a decline in first-half profit on lower valuation gains and higher employee costs after a pay equity deal. Net profit fell to $14.5 million in the six months ended Sept. 30 from $19.4 million a year earlier. The result included an $8.9 million valuation gain on its investment properties from a $14.3 million gain a year earlier as the property market shows signs of slowing after several years of solid growth.

Argosy Property was unchanged at $1.045. It posted a 58 percent decline in first-half profit as the firm became the latest listed property investor to report a little-changed portfolio valuation after several years of gains, and was faced with smaller rental income.