A Rising ASX Tide Lifts Almost All Boats
It was hard to find an Australian investor without a smile on his or her face Wednesday, with the S&P/ASX 200 (INDEX: ^AXJO) closing up 1.4% at 4347.7 points.
It wasn't a huge surprise given the performance of U.S. markets overnight, Australian time -- with nice gains on all U.S. indexes.
Company news was dominated by BHP Billiton's (NYS: BHP) (BHP.AX) output report, coming on the heels of Rio Tinto's (NYS: RIO) (RIO.AX) own results yesterday. BHP announced an 8% drop in production, but investors seemed to breathe a sigh of relief, with shares moving sharply higher.
Meanwhile, Westfield Group (WDC.AX) announced the sale of eight U.S. shopping centers, in a move to lighten its stable of "non-core" assets and improve its return on equity and earnings performance, and Telstra (TLS.AX) has announced a "ruthless" focus on cost containment, margin expansion, and upselling its bundled services.
Yeah, I thought that was business as usual, too -- but apparently Telstra felt the market needed to be reminded that management were clear on their objectives.
The mining news and Westfield's announcement helped the materials and A-REIT sectors lead the market with gains of 2.4% and 2.3%, respectively. All ASX sectors stayed out of the red, with the flat telecoms sector and a 0.2% gain for utilities dragging the chain.
Only 19 of the ASX 200 closed with losses today, with perennial yo-yo Lynas Corporation (LYC.AX) leading the falls with a 1.7% share-price fall. Other notable losses were felt by Senex Energy (SXY.AX), down 1.4%, Spark Infrastructure (SKI.AX), off 1%, and Spotless Group (SPT.AX), which fell 0.8%, rounding out a trio of S's losing money on the day.
There was a lot to like for most other ASX 200 investors, with over one-third of the index constituents gaining by 2% or more. ERA (ERA.AX) felt the warm glow of two broker upgrades, and investors enjoyed a 10.7% gain as a result. Three other companies -- Linc Energy (LNC.AX), Panoramic Resources (PAN.AX), and Dart Energy (DTE.AX) -- saw gains of 7% or more.
The Australian dollar couldn't quite muster the same enthusiasm, trading just the wrong side of even just after the market close.
The aphorism "a rising tide lifts all boats" may not have been strictly true today, but 90% of the ASX 200 saw a lift, and most investors will end today with more in their pockets than they started with.
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