11:02am: Looking at the strong early performance on the ASX today, IG Markets analyst Stan Shamu says we saw a massive turnaround in US trade, "triggered mainly by some better-than-expected economic data, with consumer sentiment coming in much stronger than expected".
"Especially with (US Federal Reserve Chairman) Dr Ben Bernanke coming out with that testimony (to Congress), that really calmed investors’ nerves about quantitative easing. It certainly seems like we’ve got some positive momentum behind us."
Mr Shamu said the four major banks were under some pressure but were still performing better than the resources sector.
‘‘We’re seeing a little bit of stress there. Not as much as in the cyclical space where we’ve really seen those stocks beaten down over last few days,’’ said Mr Shamu.
‘‘They’ve underperformed, the yield players, for a while. So, when we see a risk recovery, chances are we’ll probably see a bit more strength in the miners and the mining services companies compared to everywhere else.’’
10:51am:
Clear policies needed for Asian Century
Baker & McKenzie Managing Partner, Chris Freeland discusses the opportunities in Asia.
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10:49am: Apart from Myer, the retailers have started the day strongly:
- Woolies: +0.65%
- Wesfarmers: +1.52%
- Harvey Norman: +0.66%
- DJs: +1.1%
- Myer: -1.1%
10:46am: Macquarie Equities have issued an intial ''underperform'' on the world's biggest retail landlord, by value, Westfield, after the group warned that sales for its Australian and New Zealand centres were forecast to be flat in the coming year.
In a note to clients, the broker says: ''The stock continues to trade above our price target and on of about 18 times the PE multiple and accordingly we currently have an Underperform recommendation on Westfield''.
For the year Westfield reported a statutory profit of $1.7 billion, which was in line with market expectations. But the directors added that net property income (sales) growth in Australia/NZ is expected to be 1.5 per cent to 2 per cent in 2013, which is at the lower end of the market estimates.
Here's today's coverage on the Westfield result.
10:33am: "It’s in Mother Nature’s hands now, nothing we can do about it."
So says deputy mayor of Port Hedland shire, George Daccache, a resident of 40 years, who expects expects Tropical Cyclone Rusty to be one of the worst the town has seen.
The slow-travelling cyclone barely moved overnight but wind gusts have strengthened to 230km/h near its centre.
The Bureau of Meteorology predicts the cyclone will begin moving south on Wednesday.Port Hedland has already had wind gusts up 120km/h, with conditions set to worsen throughout the day, the bureau says. Destructive wind gusts of more than 165km/h are predicted in the area as the cyclone approaches the coast.
"This one’s a bit of a beauty," Mr Daccache said. "It’s going to be a pain waiting for two to three days for this to come and go."
10:27am: The share price performance of the companies which have reported earnings today:
- AGL: +2% to $15.49
- James Hardie: +1.3% to $9.23
- Sydney Airport: +0.8% to $3.165
- UGL: -3.7% to $10.50
- Westfield Group: +1% to $11.19
- Westfield Retail: +1% to $3.17
- wofif.com: +0.7% to $5.85
- MacMahon Holdings: -2.9% to 33 cents
10:23am: A quick look now at the early gainers on the ASX200:
- Perseus Mining: +4.98%
- Northern Star Resources: +4.4%
- Seven Group Holdings: +3.9%
- Troy Resources: +3.68%
- Boral: +2.97%
10:22am: Whereas at this time yesterday we were looking at a sea of red, the opposite is true today. All sectors on the ASX200 are happily splashing around in positive territory:
- Utilities: +1.43%
- Health: +1.1%
- Energy: +0.88%
- Consumer staples: +0.73%
- Info tech: +0.6%
- Materials: +0.58%
- Financials: +0.57%
10:18am: Shares are higher to start the day.
In early trade, the All Ordinaries index is 27.7 points higher, or 0.6 per cent, to 5049.5, while the benchmark S&P/ASX200 is 28.7 points higher, or 0.6 per cent, to 5032.3.
10:07am: As markets open, the ASX has booked at early gain of 0.3 per cent.
10:05am: Building products group James Hardie has trimmed its earnings forecast for the year, saying conditions in the housing market remain uncertain.
The group on Wednesday revealed it had made a net operating profit of $US31.5 million ($A30.95 million) in the third quarter to December 31, up from a loss of $US4.8 million ($A4.72 million) a year earlier.
The results include the company’s asbestos-related costs, plus regulatory costs and tax adjustments.
Excluding those costs, operating profit rose to $US28.8 million ($A28.29 million) from $US27.7 million ($A27.21 million).
Chief executive Louis Gries said that while the US housing market had gained momentum, earnings growth had been constrained by lower sales prices and higher costs.
But, he said, if the US market continued its recovery, earnings were expected to rise.However, conditions in Australia remained subdued and the group did not expect a substantial pickup soon.
10:04am: Here's a view on where the market is headed at the open from Evan Lucas at IG Markets:
Moving to the open, we are calling the ASX 200 up 18 points to 5022 (0.36%). Watch the yield plays today, particularly Telstra, Wesfarmers and Woolworths as people scramble to pick the dips from yesterday.
The materials space looks like it may also catch a ride north, with BHP’s ADR suggesting BHP will add nine cents to $36.44 (0.24%) today, after falling 7.6% in the last week.
With two more trading days to go in February, it looks like we may see two out of two positive months for the year.
9:50am: A bit more on Bernanke:
9:49am: It was a tale of two continents on markets overnight.
According to Luxembourg’s foreign minister, Jean Asselborn, Italy’s electoral earthquake is ‘‘a catastrophe for the euro and the European Union’’.
Meanwhile in the US, Ben Bernanke strongly defended the US central bank's bond-buying stimulus before Congress, easing worries monetary policymakers might be getting cold feet.
Consequently, Europe was down heavily on fears over the damage caused by the political ructions in Italy but US investors cheered when US Fed chief Ben Bernanke reconfirmed his commitment to the central bank's bond-buing program.
9:41am: Engineering firm UGL’s first half profit has slumped by 53 per cent due to $25 million in costs from a restructure.
UGL made a net profit of $26 million in the six months to December 31, down from $55.4 million in the previous corresponding period.
Underlying net profit, which excludes the costs of its restructure and rebranding of one of its businesses, was $51 million in the six months to December, down from $72.2 million in the previous corresponding period.
Chief executive Richard Leupen said cost overruns on several infrastructure projects also contributed to the weaker performance, but those projects are now either complete or near completion.
9:36am: An interesting question on coal:
9:35am: Something on the recent dramas in Italy. Here's a full story on the bond fallout from the election:
9:33am: A few good tweets this morning on a range of issues, kicking off with earnings:
9:30am: Energy utility AGL has boosted its net profit to $364.7 million for the December half, well up from $117 million earned a year earlier, which largely reflects the inclusion of the Loy Yang A power station which was acquired last year.
Revenue rose to $4.97 billion from $3.6 billion, with earnings a share reaching 66.5c up from 24.5c.
Underlying earnings rose 20 per cent to $279.4 million, it said, after booking a loss on the change in value of financial instruments.
The group enjoyed a strong performance of its power generation business thanks to the full inclusion of Loy Yang A which was partly offset by weakness on the retail side, amid stiff competition for customers and eroding margins.
Even so, AGL said it lifted customer numbers by more than 60,000 in the key NSW market.
The interim dividend has been raised to 30c a share from 29c a share.
9:25am: Sydney Airport has reported a net profit of $179.2 million for the 2012 financial year, an increase a 47.4 per cent increase from the previous year.
The company declared a a full-year dividend of 21 cents per share.
Southern Cross Airports Corporation Holdings, the owner of Sydney Airport, reported a consolidation net loss of $80.3 million for the year ending December, down from $121 million the year before.
Sydney Airport's chief executive Kerrie Mather said the volume of international passengers had growed by 5.6 per cent as new international low-cost airlines came to the city.
"2013 has started strongly with 3.9 per cent international passenger growth in the year to date," Ms Mather said.
"Management will continue to market Sydney Airport to our airline customers and work closely with our industry and government partners to drive tourism growth.
Sydney Airport also reported revenue of $1.06 billion for the 2012 financial year.
9:18am: Slater & Gordon has reported a net profit of $19.1 million for the six months to December, a 61.3 per cent increase from the previous corresponding period, as the law firm signalled its intention to advance its UK expansion.
Slater & Gordon, the first law firm in the world to list on a stock exchange, declared a fully franked interim dividend of 2.75 cents per share.
"Expansion into the UK is progressing well and delivered in line with expectations of $34.3 million in revenue and [net profit before tax] of $3.5 million for the period," the company said.
"One the back of this performance Slater & Gordon is well placed to expand its operations in the UK in a market that is four to five times that of Australia."
Slater & Gordon's managing director Andrew Grech said his firm was in "good shape".
"We have strong prospects for further profitable growth and we have the resources and the people to be able to deliver it."
9:17am: First up in earnings ...
Westfield Group has reported a net profit of $1.72 billion for the 2012 financial year, an 18.3 per cent increase from the previous corresponding period.
The shopping centre owner declared a final total dividend of 24.75 cents per share.
"The performance for the year has been very good and in line with expectations," Westfield Group's co-chief executives Peter and Steven Lowy said.
"This has been a significant year for the Group as we continued to position WDC to generate greater shareholder value."
Westfield Group also reported earnings before interest and tax of $2.12 billion, a 3 per cent increase from 2011.
9:14am: For a comprehensive look at this morning’s business news, check today’s need2know. Here are this morning’s key markets numbers:
- SPI futures are 29 points higher at 5007
- The $A is lower at $US1.0229
- In New York, the S&P500 was 0.61% higher at 1496.94
- In Europe, the FTSE100 lost 1.34% to 6270.44
- China iron ore was flat at $US151.90 a metric tonne
- Gold rose $US29.80 to $US1615.50 an ounce
- WTI crude oil fell 76 cents to $US92.35 a barrel
- Reuters/Jefferies CRB index lost 0.2% at 293.23
9:11am: Morning everyone. Welcome to the Markets Live blog for Wednesday.
Contributors: Thomas Hunter, Jens Meyer, Max Mason
This blog is not intended as investment advice
BusinessDay with agencies
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