The market is down 106 — was down 159 at worst in-line with the 165 point fall predicted by the SFE Futures this morning.
All sectors down. Resources grossly underperforming with Oz Minerals down 16% indicating more write downs on some of their zinc and nickel assets and falling profitability this year due to heavy falls in metal prices. BHP and RIO down 7.3% and 9.8%. Wesfarmers down 2.2% with their target cut to 1950c from 2486c by Credit Suisse. The ASX 200 has dropped over 50% from its high and has dropped through the key 3490 technical support level — next support at 3163 points. If the market keeps falling at the current rate, it will hit zero in 22 days.
The Dow was down 427. Dow Jones down 5.1%. S&P500 down 6.1%. Nasdaq down 6.5%. Up 80 at best. Down 437 at worst. Dropped steadily all session. No good news — terrible economic data. October consumer prices had their largest fall in 61 years. October’s construction of new homes fell to the lowest annualized rate in 50 years. October’s CPI inflation figure has its biggest drop since 1947. The US recession expected to deepen. Fed’s FOMC minutes reveal cuts in their economic growth forecasts for FY09, 10 and 11. Automakers fail to get a $25bn bailout – car makers down 21%. Commodities all smashed. Material stocks down 6%. Metals down heavily. BHP and RIO down over 10% in ADR form. Oil price down 78c to a 22 month low of $53.64. A$ down 2.23% against the US dollar. Gold up $3.30 to $736.
Babcock & Brown (BNB) down another 20% as it announces it can’t get a deposit released from one of its banks and has placed its shares in a trading halt until the situation is resolved. They said yesterday that it will be “difficult” to remain in compliance with debt covenants.
In the news today…
- Sonic Healthcare (SHL) has held its AGM — says underlying business remains robust, reaffirms original guidance and FY EPS is expected to be up 10%.
- Gunns (GNS) responded to an ASX price query by saying fiscal 2009 guidance remains intact and that it doesn’t expect material abnormal items in 1H09.
- Macquarie Airports (MAP) has released traffic numbers — traffic at its Sydney international terminal increased 0.8% in October.
- Cabcharge (CAB) has announced the acquisition of bus operator Kefford Group for $149.2m in a JV deal with Singapore’s ComfortDelGro Corp.
- CopperCo (CUO) is in a trading halt.
- Goodman Fielder (GFF) held its AGM – Expects FY net profit of $191m-$204m and to be in a solid position come year-end.
- SP Ausnet (SPN) said net profit fell 22.9% to $92.2m but registered a slight increase in underlying profit of 2.4% to $122.5m. Say they are on track to meet FY guidance.
- Westpac Bank (WBC) has released the executive team that will lead the merged group.
Broker Stuff today…
- ABN AMRO maintain their Buy recommendation on Crown (CWN) but cut their target price to 838c from 1175c after cutting their FY09 expected NPAT to $282m. They estimate that net debt at 3.3x EBITDA by the end of FY09, which is well inside its main debt covenants.
- Oz Minerals (OZL) was upgraded to Buy from Neutral by UBS Warburg despite OZL saying earnings were likely to be lower than last year. They have a 100c target price but admit it’s a stock that is likely to remain under short-term pressure.
- Credit Suisse upped their recommendation on WorleyParsons (WOR) to Outperform from Neutral due to recent share price appreciation. “Since Nov. 5, WOR’s share price has fallen 27.2% while the S&P/ASX 200 has fallen 19.3%”.
- Charlie Aitken of Southern Cross Equities says equity markets are already factoring in deep global recession.
- The Dow Futures suggest a 27 point fall on Wall Street tonight.
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