Market Update & Important Indicators:
Soaring Wal-Mart shares and the passage of a tax-overhaul bill in the House helped send U.S. stock indexes toward their biggest gains since September intraday. The moves reflected what has powered much of this year's rally: improving profits and sales at American companies, plus the prospect that corporate tax cuts could boost earnings even further. After the S&P 500 posted its steepest one-day decline since September a day earlier, investors snapped up shares across several sectors of the stock market. Some of the biggest gainers: groups that have struggled this year, such as consumer staples companies, and technology stocks, major contributors to this year's gains. The Dow Jones Industrial Average added 187 points, or 0.8%, to 23458, while the S&P 500 also rose 0.8%. The Nasdaq Composite rose 1.4%. The U.S. gold price finished ever so slightly up for the day’s trading at 1,278.1 US$/oz.
European stocks broke their longest losing run in a year, with major regional indexes rebounding after well-received corporate updates. Investors also cheered a rise in shares of car makers after the release of encouraging EU sales figures. The Stoxx Europe 600 index rose 0.8% to close at 384.93, snapping a seven-session streak of declines. Germany's DAX 30 index added 0.6% to 13,047.22, while France's CAC 40 index gained 0.7% to 5,336.39. The U.K.'s FTSE 100 index ended 0.2% higher at 7,386.94. The euro traded at $1.1777, down from $1.1791 late Wednesday in New York.
Asian equities stabilized after Wednesday's slide, helped by gains in technology and telecommunication stocks. Hong Kong's Hang Seng Index was up 0.6%, lifted by a rise in technology heavyweight Tencent, which reported a nearly 70% jump in third-quarter net profit, beating expectations thanks to continued demand for its online games. Japan's Nikkei Stock Average rebounded 1.5%, though the index was still off around 3% from its 25-year high reached on Tuesday last week. The Nikkei rose, with market participants shrugging off overnight softness in the U.S., as well as a tight range-bound Japanese yen. The Nikkei closes up 322.80 points at 22351.12. Driving the index higher were gains in financial stocks. South Korea's Kospi added 0.7%.
Australian stocks ended their first four-day losing streak in six months, though the gains were hardly robust. Most markets in the region rose more than the S&P/ASX 200's 0.2% to 5943.5, a gain which was cut into with an end-of-session adjustment lower. Commodities continued to loom large, with the energy sector rebounding 1.9% after two straight days of similar sized declines. Helping was Santos' 13% surge after saying it's rejected a takeover bid. Ultimately not moving either stocks or currencies in Australia was the October jobs report, which included a drop in unemployment and lower-than-expected job growth.
The London Metal Exchange’s 3-month copper contract traded slightly lower Thursday, falling 0.5% to finish at $6,737/t. The other base metals finished mostly lower overnight. Aluminium prices fell 0.1% to 2,085/t, whilst zinc prices contracted 0.3% at 3,184/t. Lead prices declined 1.2% at 2,393/t, whilst nickel prices continued their strong downward trend, dropping 2.9% at 11,294/t. Tin was the only base metal to improve its position overnight, rising 0.1% to 19,432/t.
In this Issue:
Southern Cross (SXE) | Funding growth | HOLD
Market Cap $171m | Current Price $0.74 | Valuation $0.80
After acquiring East Coast-based Heyday in FY17 SCEE transformed its business by diversifying revenue streams across sectors and geographies. The Company now has strong growth prospects through exposure to the NSW commercial market. The recent placement ($33.2m at an issue price of $0.75) will provide necessary working capital to support this strong growth. However, despite our positive view, recent share price gains leave little upside to our revised $0.80 valuation causing us to downgrade to a HOLD.
Recent Contacts & Presentations:
Metro Mining Ltd (MMI), Botanix Pharmaceuticals Ltd (BOT), Xanadu Mines Ltd (XAM), Orthocell Ltd (OCC), Whitebark Energy Ltd (WBE), Atrum Coal Ltd (ATU), Minotaur Exploration Ltd (MEP), Panoramic Resources Ltd (PAN), Sino Gas & Energy Holdings Ltd (SEH), Great Boulder Resources Ltd (GBR), Metallum Ltd (MNE), Gold Road Resources Ltd (GOR), Apollo Consolidated Ltd (AOP), De Grey Mining Ltd (DEG), Triton Minerals Ltd (TON), Evolution Mining Ltd (EVN), Silver Mines Ltd (SVL), NTM Gold Ltd (NTM), Gascoyne Resources Ltd (GCY), Southern Cross Electrical Ltd (SXE), MOD Resources Ltd (MOD), Meteoric Resources NL (MEI)