The market is up 1 — holding up well after broad-based weakness in the US overnight. The SFE Futures suggested a 41 point fall in the market this morning. Sectors mixed. Industrials, resources and property up. Financials, discretionary stocks, healthcare and utilities down.
The Dow was down 137. Down all session — negative 155 at worst. All sectors down. Financial stocks fell the most — down 7.7% on after market news of Goldman Sach’s capital raising. Weak retail sales figures. Significant drop in March wholesale prices. BHP down 1.85% and RIO up 0.56% in ADR form overnight. Metals mostly up. Oil price down 0.71% to $49.51. Gold down $3.80 to $892.00. Bonds up. A$/US$ down.
Lots of research out on Qantas this morning after their profit warning yesterday — 2 Holds and 3 Buys with one Sell. A number of brokers cutting their price targets. Down 4% this morning having turned an 11% fall yesterday into a 4c rise to 200c. RBS Equities cut Qantas (QAN) to SELL from Hold and slash price target to 165c from 205c — cut their FY09-10 pre-tax forecasts by 73% and 52%.
Fortescue Metals (FMG) down nearly 3% as the Chinese planning authority surprisingly withheld approval of the Hunan Valin investment in 17% of FMG. Their concerns are about the conditions imposed by the FIRB being too onerous in particular “supplementary” restrictions on the Hunan Valin director appointment to the FMG board who will be restricted from using pricing information against the company in iron ore price negotiations which could set an “unfavourable precedent”. The deal may be delayed.
- Rio Tinto (RIO) has priced US$3.5 billion worth of bonds as part of the normal process of terming out existing debt facilities. Deutsche Bank strategists said it reduces RIO’s refinancing risks and provides them with another strategy should the Chinalco deal fall through.
- Arrow Energy (AOE) up 7% having achieved strong first gas flows from the Fort Cooper Coal Measures in the Bowen Basin — a major boost to AOE’s plans to supply natural gas for the LNG trains planned for the Gladstone area.
- AGL Energy (AGK) announced its decision not to exercise option to acquire $1bn worth of Queensland state coal seam gas and power generation assets from BG Group.
- Energy Resources (ERA) posted their quarterly activities report in-line with expectations noting 1Q material mined was 18% down on the 4Q08.
- UBS cut Goodman Group (GMG) to a SELL from a Buy and cut their price target to 30c from 325c due to financing risks associated with a $460m facility due for refinancing next month.
- Credit Suisse said OneSteel’s (OST) trading halt yesterday may be related to a capital raising.
- Wespac’s Chief Economist, Bill Evans, said Australia’s recession is starting to resemble the severe slumps in the economy in the early 1990’s and in 1982.
- Copper and Zinc prices rallying — some of the small miners are going nuts as they move from going out of business into “surviving” and into “thriving” as the metal prices rise.
The Dow Futures suggest a 44 point fall on Wall Street.
MARCUS PADLEY is the Author of the MARCUS TODAY Daily Stockmarket Newsletter.
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