The market is down 66 on the lows of the day having been up 7 at the peak and up 214 points yesterday. The Futures suggested a 24 point fall in the market this morning.

The Dow Jones closed down 46 – 193 points off its high. It was down 65 at its worst and up 147 at its best. After the 416 point rise yesterday the doubts crept in about the Fed’s ability to fend off recession with a few 28 day lending facilities. A number of brokers including Citigroup and Goldmans suggested the Fed cash injection would fall short of easing the credit market liquidity issue. Retailers closed down sharply on weak retail sales numbers, Airlines fell over and despite the oil price rise, the energy sector fell 1.5% as crude inventory numbers came in higher than expected. 12 hedge funds have frozen redemptions this month overnight GO Capital froze redemptions on its $880m fund saying “current market circumstances don’t allow the fund to sell investments at a reasonable price”. Seems the Fed have delivered an aspirin to a patient on life support.

  • Both BHP and RIO up in ADR form overnight, 1.6% and 0.9% respectively. BHP down 4 today to 3676. RIO up 38c to 12580c.
  • Metals all up overnight – Zinc up 3%, Aluminium up 2% and Copper 1.5%. Nickel was up 1.5%.
  • Oil price up $1.13 to $109.86 despite the price initially falling after the Energy Department’s Energy Information Administration said inventories increased by 6.2m barrels last week, more than triple the 1.6m barrel increase analysts had expected. Woodside up 29c to 5413c.
  • Gold up $4.50.
  • Bonds up with the 10 year yield down to 3.44% from 3.59%.

Bit quiet today on the news front…

  • JP Morgan believes the chances of French company, BRED Banque Populaire, bidding for Bank of Queensland (BOQ) is minimal despite the announcement yesterday that it had lifted its stake to 7.44% from 6.44% in BOQ. BOQ up 6c to 1448c.
  • In an attempt to cut it debt and gearing ratio by 150bps, Goodman Group (GMG) has sold its 40% stake in a Singapore JV management company and its 6.8% stake in Ascendas Real Estate Investment Trust. GMG unchanged at 370c.
  • Retailers struggled yesterday despite the overall market closing over 2% higher after Australian consumer confidence fell to the lowest level in almost 15 years following the RBA interest rate rises. WOW down 1c to 2769c, WES down 78c to 3637c, HVN down 11c to 366c, DJS up 2c to 340c and JBH unchanged at 980c.
  • ANZ Banking Group (ANZ) was the best performing bank yesterday – up 5.76% – its CEO Mike Smith reaffirmed FY08 ERPS guidance in an interview on Bloomberg and said credit worries won’t de-rail their Asia plans. ANZ down 35c to 2170c.
  • Billabong (BBG) are presenting to analysts today. The stock is up 7c to 1197c.
  • Credit Suisse expects Macquarie Media (MMG) to use the cash they received from the sale of Taiwan Broadband Communications sales to make acquisitions or undertake a share buy back. They maintain their OUTPERFORM recommendation and 550c target price. MMG down 5c to 384c.
  • Hill Industries’ (HIL) Managing Director David Simmons announced his retirement effective 30 June. Graham Twartz will assume the role of interim MD. HIL up 5c to 411c.
  • AWB’s MD said the company was well placed to compete under the new wheat export laws to come into effect on July 1. AWB unchanged at 242c.
  • Lots of research around on Perpetual Trustees (PPT) downgrading earnings after their disappointing February Funds under management numbers yesterday. PPT down 3.4% to 4861c.
  • Fortescue Metals chairman and Australia’s riches man, Andrew Forrest, reiterated yesterday that FMG was on track to ship its first load of iron ore in May. He told a journalists, “If we have to load that train with a shovel we will”. FMG down 4c to 761c.
  • The AFR says Midwest (MIS) has been referred to ASIC by the ASX on concerns about its market disclosure. MIS down 5% to 412c.

The Dow Futures currently suggest a 34 point fall.


Peter Fray

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Peter Fray
Editor-in-chief of Crikey