Overseas Market Report – Stocks Sink as Oil Weakness Weighs
Stocks were sharply lower on Friday as oil prices fell again and a surprise move by the Bank of Japan failed to excite investors.
The price of crude oil fell again in New York, with a barrel selling for less than $35.
Yields on U.S. treasury bonds fell as investors seeking a safe-haven outweighed the Fed's move to boost short-term rates on Wednesday.
The Bank of Japan announced additional stimulus measures. The bank will now buy longer-term bonds and will purchase more equities.
At the close the Dow, S&P 500 and NASDAQ were down 2.1%, 1.8% and 1.6% respectively.
For Australian ADRs listed on the NYSE, BHP Billiton gained 29 cents (1.23%) to $23.91, ResMed fell 117 cents (2.12%) to $54.00, Telstra Corporation rose 28 cents (1.45%) to $19.54, Spark New Zealand slipped 1 cent (0.10%) to $10.42 and Westpac gained 27 cents (1.19%) to $22.92.
At 7:45 AM (AEDT), the 10-year Treasury note yield was 2.20% and the 5-year yield was 1.68%.
Shares of BlackBerry (BBRY) were up after the firm reported better-than-expected results. BlackBerry's revenue in the quarter (adjusted upward by $9 million due to some acquisition-related deferred revenue) was $557 million, up 14% sequentially. Software revenue (adjusted) was the bright spot, more than doubling from last quarter thanks to strong organic growth for BES 12, an upfront licensing payment for the firm's IP, and solid revenue contributions from recently acquired Good Technology and AtHoc.
Olive Garden parent Darden (DRI) reported upbeat results and also raised their earnings guidance for 2016. The firm also announced a new $500 million stock buyback program.
European markets were lower. The FTSE 100, Paris CAC and Germany's DAX were down 0.8%, 1.1% and 1.2% respectively.
Asian shares were also down. The Nikkei 225 fell 1.9%, the Hang Seng was off 0.5% while the Shanghai Composite gained 0.3%. India's Sensex fell 1.1%.
Australian Market Report – Local Markets Are Expected To Open Lower
Ahead of the local open SPI futures were 40 points lower at 5,021.
Friday 18 December – close. Local stocks opened lower this morning, following a weak lead set by global equity markets overnight. The local sharemarket was hit hard by a broad-based selloff from energy and mining stocks in early morning trade, but fought its way back after midday turnaround, racking up a third day of gains. There were mixed results from the sectors; consumer staples gained most significantly while materials lagged behind the rest. The Australian dollar appreciated against most major currencies, with the exception of the Japanese yen.
The All Ordinaries rose 5.90 points to 5,156.50 while the S&P/ASX 200 added 4.70 points to 5,106.70.
For the first week out of the last four, Australian stocks pushed higher as the market clawed its way back from profit taking on Friday.
That left the market up 1.5% for the week following solid gains over the past two days as it braced for then absorbed the U.S. Federal Reserve's first rate increase in years. Still, the ASX 200 is down 5.6% in 2015.
A recovery in the heavily-weighted financial sector helped turn the market around for the day and led gains in recent days. That helped offset further weakness in the resources sector as oil prices continued to slump.
For the day, 2.63 billion shares were traded worth 8.73 billion Australian dollars, Commonwealth Securities said.
In This Issue
MMA Offshore (MRM)
MMA Offshore announced that the Company has been awarded a five year contract by ConocoPhillips. The Contract will see the Company's Platform Supply Vessel ("PSV"), "Mermaid Inscription", provide platform supply and static tow services in support of ConocoPhillips operations at its Bayu Undan facility located in the Timor Sea, 500km north-west of Darwin and 250km south of East Timor. MRM lost 1 cent to $0.22.
Oil Search (OSH)
Oil Search announced that it has refinanced its two existing US$125m bilateral revolving credit facilities provided by Australia and New Zealand Banking Group (ANZ) and Commonwealth Bank of Australia (CBA). Following a competitive bid process, which was very well supported, both US$125m bilateral revolving credit facilities have been extended with ANZ and CBA. The renewed facilities have a 3 year term and expire in December 2018. Together with the Company's US$500m non-amortising revolving credit facility, due to expire in October 2017, the Company has total undrawn corporate facilities of US$750m. OSH fell 8 cents to $6.03.
Sydney Airport (SYD)
Sydney Airport announced that passenger traffic continued to surge during November 2015 growing 5.6% compared to the pcp. Domestic passenger traffic also performed well, growing 4.2%, and total traffic grew by 4.7%. This excellent result was driven predominantly by seat capacity growth from new and existing airline customers. Foreign nationality demand (+7.5%) was a significant contributor to the robust international passenger growth, with Chinese (+16.5%), USA (+5.5%), Korean (+21.7%), Indian (+11.8%), Singaporean (+14.1%) and Philippine (+31.0%) nationalities performing well. These markets all experienced seat capacity increases relative to the pcp. SYD rose 8 cents to $6.26.
Recent Contacts & Presentations
Empire Oil & Gas (EGO), Millennium Minerals (MOY), Geopacific Resources (GPR), Saracen (SAR), Agrimin (AMN), Salt Lake Potash (SO4), Reward Minerals (RWD), Transerv Energy (TSV), Carnarvon Petroleum (CVN), Success Resources (SGU), High Peak Royalties (HPR), Heron Resources (HRR), OBJ (OBJ), Goldfields Money (GMY), Hazer (HZR), MZI Resources (MZI)