Australian Financial Review
Thursday 27/8/2015
Page: 22
Section: Companies and Markets
Region: Australia Circulation: 57,243
Type: National
Size: 493.00 sq.cms.
Frequency: MTWTF--
Brief: #NSWPARL
Page 1 of 2
ASX struggles higher
after China rout ends
Equities
Stephen Cauchi
Australian shares endured another
volatile day of trading but ultimately
ended the day higher, amid continued
worries about the state of China's
economy and despite a poor Wall
Street lead.
The Dow Jones fell another 1.3 per
cent on Tuesday night, despite climbing 2.8 per cent higher in intraday trading. The index has fallen 10.5 per cent
over the past five sessions, marking its
biggest five-day fall since August 2011.
That late sell-off in US equities spilled
over on to the ASX at the start of Wednesday trade, and the benchmark S&P/
ASX 200 index dived 1.6 per cent in the
half-hour after opening, led by the big
banks, only to rebound just as strongly
as bargain hunters moved in.
Investors were also buoyed by an
end to the rout in Chinese shares.
Although the Shanghai Composite
index was down 1.6 per cent by early
afternoon trade, it was up 1.8 per cent
by the time the Australian market
closed, helping to finally drive the ASX
into positive territory.
The ASX 200 finished 36 points, or
0.7 per cent, higher at 5172.8, while the
All Ordinaries added 35 points to
5178.9.
Shares rallied "because people realise the market's been trashed down",
Equity Trustees head of asset management Paul Kasian said.
"If you compare dividend yields to
the cash yield it's bloody cheap. It's
never been as cheap as this. You have to
go back to the worst days of the GFC.
"Even on a price-to-earaings basis,
the market doesn't look expensive."
Wall Street's finish overnight was
"disturbing", CMC chief markets analyst Ric Spooner said, "but we appear to
have withstood the unsettlingly weak
close from US markets last night. And I
think that shows there's some real buying interest in our market at the
moment despite the ongoing volatility.
"People are sensing value and don't
want to miss this opportunity, even at
the risk of getting in too early," Mr
Spooner said.
The reasons for the sharp bounce
shortly after opening were unclear, he
said. "I'm not aware of any news event
that's triggered that, it's just the way
market tactics work. People like to see
the open, they like to see how low it's
getting, get a sense of whether that
selling will really continue and then
you might find the bigger orders start
coming into the market"
Auscap Asset Management portfolio
manager Tim Carleton described the
market as "amazingly volatile" and
"pretty oversold".
"We've added to some positions
selectively over the course of the move
down in the market, but we're not
going crazy buying things," he said.
All banks stocks were up: ANZ by
0.3 per cent to $28.07, Commonwealth
Bank by 1.4 per cent to $76.13, National
Australia Bank by 1 per cent to $31.39,
and Westpac by 1.2 per cent to $31.28.
BHP Billiton's earnings report, and
the generous dividend in particular,
pushed the big miner's shares up 2.6
per cent to $23.94, while Rio Tinto
increased 0.9 per cent to $48.89. Telstra
was 0,5 per cent higher to $5.86.
Sydney-based vitamins maker Blackmores became the second stock in
recent times to break the century barrier, soaring 10.6 per cent to $100, after
revealing on Tuesday that net profit
after tax for 2014-15 had jumped 83 per
cent to $46.6 million.
Among Wednesday's earnings results, plastic packaging manufacturer
Pact Group enjoyed a 17 per cent leap in
net profit to $67 million.
Ref: 455600283
Australian Financial Review
Brief: #NSWPARL
Page 2 of 2
Thursday 27/8/2015
Page: 22
Section: Companies and Markets
Region: Australia Circulation: 57,243
Type: National
Size: 493.00 sq.cms.
Frequency: MTWTF--
Equities
How the market performed on Wednesday
Sector performance (%)
S&P/ASX 200 Index (points)
10:00
12:00
Energy HR
IT I
Materials
Consumer staples 1 ^
+0.68
Financial H i +0.59
Telecoms H I +0.49
Consumer disc H+0.15
Utilities I +0.11
Industrials 1 +0.04
-0.29 • Healthcare
4:00
2:00
Best and worst stocks (%)
Greencross
Paladin Energy
UGL
Beach Energy
Evolution Mining
Arrium
Comparative performance (%)
CBA(+1.40%)
10:00
11:00
12:00
:
1:00 .
2:00
. 3:00
4:00
SOURCE: BLOOMBERG
Ref: 455600283