ASX CLOSE: ASX 200 holds on to the day's gains; financials perform

Tuesday 22nd December 2009

Across Asia, regional indices are broadly higher, courtesy of strong offshore leads and a weaker Yen which is boosting the earnings outlook for Japanese companies. The Nikkei 225 is the best performer in the region, higher by 1.4% while the Hang Seng is firmer by 1.2%. Not faring quite as well, but still in positive territory is the Kospi, higher by 0.4%, while the Shanghai Composite is lower by 0.7%.

In Australia, the ASX 200 posted some handsome gains, to close higher by 1.5% at 4704.20, right on its highs of the day. Pleasingly, the market was able to hold onto its gains rather than rolling over as it has so often in the past few weeks. Gains today were broad based with the heavyweight financial, materials, and industrial sectors all enjoying strong sessions. Good contributions also cam from the property and healthcare names.

The financial sector finished as the best performer for the day, stronger by 1.8% with all four of our major trading banks moving higher. Westpac and ANZ closed up by 3.4% and 2.5% respectively, NAB was higher by 1.2%, while CBA lagged behind but was still firmer by 0.8%. Regional banks, Suncorp-Metway and Bendigo Bank, also ended higher by 0.7% and 2.5% respectively.

Our other heavyweight sector, materials, enjoyed a strong session, firmer by 1.5%, on the back of stronger overnight base metals prices and positive leads from US counterparts. BHP and Rio Tinto closed higher by 1.7% and 3.1% respectively, while Alumina firmed by 3.5% after its JV partner Alcoa surged 7.9% in the US after another broker upgrade.

Making news in the sector today was talk that Macarthur Coal could be set to swallow rival Gloucester Coal with a cash and share bid. Both companies have placed their shares in a trading halt. Speculation suggests Macarthur is in discussions with Gloucester's 87.7% shareholder, Noble Group, over its stake.

Not fairing so well in the materials space today were the gold miners. With gold getting pummelled overnight to be trading back below US$1100, it wasn't surprising to see Lihir Gold and Newcrest Mining close down 0.9% and 2.1% respectively. Newcrest also announced its shutdown of Telfer Mine for the next two days as Cyclone Lawrence moves through.

Despite crude falling 1.5% overnight, the energy sector saw some reasonable gains to be end higher by 0.9%. Most of the major names closed comfortably in positive territory with Caltex being the clear standout performer, stronger by 5.8%.

The consumer space also looked quite healthy today with both staple and discretionary names generally firmer. Wesfarmers was higher by 0.8%, Woolworths closed up by 1.7% while Myer, David Jones, and JB Hi-Fi were higher by 0.5%, 0.4% and 1.3% respectively.

Elsewhere, the other major talking point of the day was Sinochem's revised offer for Nufarm. The two parties have been in takeover talks for several months with the suitor today lowering its offer from $13 to $12 to reflect Nufarm's poor trading performance over the last six months and its less than rosy guidance heading into 2010. Nufarm's shares are in a trading halt while its Board mulls over the offer.

Prices are in AUD unless otherwise stated.
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