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IG Markets Australian Market Wrap

Post Time:Sep 07,2009Classify:Industry NewsView:526

Across Asia, regional markets were all higher in subdued Monday trade ahead of tonight´s Labor Day holiday in the US. The Nikkei 225 finished 1.3% higher while the Kospi was flat for the session. The Shanghai Composite and Hang Seng Index are still trading, both up 1.4%.

In Australia, the ASX 200 closed the day up 0.4% at 4454.4 with the property trusts, healthcare, financials and materials sectors adding most of the points. Trade was fairly quiet given the US is on holiday tonight.

With many professionals due back from summer holidays in the US on Tuesday, investors are likely to get a better read on the underlying mood of the market and whether or not the bears will have it all their own way this month.

Australian investors seem sceptical of Friday´s gains in the US, premised on a slower-than-expected decline in job losses. Friday´s job numbers were effectively a ´split decision´, however, US investors chose the ´glass half full´ stance.

It looks like the local market wants something more tangible to push the index higher. Perhaps Thursday´s Australian employment data can provide this.

On the economic front, ANZ´s monthly read on job ads saw advertised jobs increase in August, the first gain since April 2008. Total job ads grew 4.1% in August from July to average 130k ads per week. The percentage increase was the fastest monthly growth since December 2007, further fuelling expectations in some corners of the market of a pre-Christmas rate hike.

While today´s ANZ job ads provided positive anecdotal evidence that the labour market is set to recover, investors eyes will be firmly focussed on Thursday´s jobs data for further confirmation.

Looking across the sectors, the property trusts (3.4%) healthcare (1.8%), financials (0.7%), materials (0.7%) and industrials (0.6%) sectors added the most points.

In the property space, the likes of Macquarie Countrywide Trust (8.6%), Macquarie Office Trust (5.7%) and Westfield Group (4.3%) were the main advancers.

Across the healthcare stocks, CSL (2.9%) and Sonic Healthcare (2.7%) were the two biggest gainers. Elsewhere in the sector, Sigma Pharmaceuticals announced this morning that it had agreed to buy a portfolio of brands and a manufacturing plant from Bristol-Myers Squibb for $60 million. The firm also announced a 1-for-3 fully underwritten share entitlement offer to raise $297 million to help fund the acquisition, and cut its gearing to approximately 29% from 41%.

The financials sector was well bid today following a solid set of leads from US trade. The S&P Financials sector closed 0.8% higher with the likes of Citigroup, Bank of America, Goldman Sachs and JPMorgan all up between 1.7% and 0.6%, with Citi the top performer. Also, the KBW Banking sector rose 1.4%.

Locally, Suncorp-Metway (4.3%) and QBE Insurance Group (2.4%) led the sector higher. Three of the big four banks were stronger, up between 0.4% and 0.9%, with ANZ the best performer. However, Westpac Banking Corporation was the lone detractor, down 0.9%.

The materials sector saw some renewed buying interest today after being one of the worst performing sectors last week. Modestly higher commodity prices in Friday´s offshore session saw broad strength across the basic materials space in both London and New York trade which translated into solid performances for heavyweight miners BHP and Rio Tinto. The two bellwether stocks finished higher by 0.4% and 2.3% respectively. Elsewhere, gold stocks like Newcrest Mining and Lihir Gold posted gains of 2.3% and 0.7%.

In the industrials sector, the likes of Toll Holding, United Group, Macquarie Airports, Macquarie Infrastructure Group and Leighton Holdings were the major advancers, all up between 0.7% and 3.5%.

The flat to slightly weaker crude price saw mixed trade across the energy space. While the overall sector was flat, Paladin Energy, Caltex, Worley parsons and Oil Search were up between 0.3% and 3.6%. Sector heavyweights Woodside Petroleum and Santos finished the session lower, down 0.5% and 1.4%, respectively.

Source: ibtimes.com.auAuthor: shangyi

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