Good Morning Fellow Traders,
The Australian share market has closed in positive territory, with further takeover activity and a strong day for miners and banks driving the market to fresh post-GFC highs.
The benchmark S&P/ASX200 was up 41.9 points, or 0.7 per cent, at 6,038.9 points at 1630 AEDT on Monday, with strong upward momentum provided by a takeover-inspired IT sector and the big banks and major miners.
CMC Markets chief market strategist Michael McCarthy said the local market was reaching for new post-financial crisis highs, buoyed by pent up buying demand.
"The increasing volume of merger and acquisition activity does suggest there's going to be a lot of money finding its way back onto the market and I think some of the action we're seeing today is investors looking ahead and realising once again; they have too much cash," Mr McCarthy said.
Shares in construction software maker Aconex climbed 44.2 per cent to $7.63, following the welcome $1.6 billion takeover offer from US tech giant Oracle.
But it was the miners, driven by strong commodity prices, that led the market, BHP Billiton, Rio Tinto and Fortescue Metals all between 0.8 per cent and two per cent higher.
And after announcing a $1.5 billion share buyback, ANZ led the big four banks, up 2.1 per cent to $28.82.
Westpac and National Australia Bank gained 0.4 per cent and 0.5 per cent respectively, while CBA was up 0.1 per cent.
The investment bank Macquarie was 1.9 per cent stronger, at $98.70
In company news, shares in the online retailer Kogan.com sprang to fresh highs on Monday, up 10.3 per cent, at $5.46, following its latest expansion - this time into selling pet insurance.
Downer EDI shares were 0.6 per cent weaker, at $6.87, after the engineering group announced its Carmichael coal mine contracts with India's Adani group had been scrapped.
The troubled Retail Food Group sank to a new five-year low, down seven per cent to $2.65, as lingering media reports allege the owner of Gloria Jean's, Brumby's and Donut King is mistreating franchisees.
Meanwhile, with the US dollar finding starch the closer Republicans edge toward business-friendly tax reform, the commodities-supported Australian dollar gave some small ground against its US counterpart.
The local currency was trading at 76.58 US cents at 1630 AEDT, from 76.72 on Friday.
ON THE ASX AT 1630 AEDT:
* The benchmark S&P/ASX200 was up 41.9 points, or 0.7 per cent, at 6,038.9 points
* The broader All Ordinaries index was up 42.9 points, or 0.7 per cent, at 6,130.0 points
* The SPI200 futures contract was up 33 points, or 0.6 per cent, at 6,041 points
* National turnover was 3.4 billion securities traded worth $5.7 billion
CURRENCY SNAPSHOT AT 1700 AEDT:
One Australian dollar buys:
* 76.61 US cents, from 76.72 on Friday
* 86.31 Japanese yen, from 86.11 yen
* 65.14 euro cents, from 65.12 euro cents
* 57.43 British pence, from 57.08 pence
* 109.22 NZ cents, from 109.28 cents
GOLD:
The spot price of gold in Sydney at 1700 AEDT was $US1,256.01 per fine ounce, from $US1,254.93 per fine ounce on Friday.
BOND SNAPSHOT AT 1630 AEDT:
* CGS 4.50 per cent April 2020, 1.9538pct, from 1.9787pct
* CGS 4.75pct April 2027, 2.4981pct, from 2.5263pct
Sydney Futures Exchange prices:
* December 2017 10-year bond futures contract at 97.435 (implying a yield of 2.565pct), from 97.4725 (implying a yield of 2.5275pct) on Friday
* December 2017 3-year bond futures contract at 97.9 (2.1pct), from 97.955 (2.09pct).
(*Bond market closes taken at 1630 AEDT previous local session; currency closes taken from 1700 AEDT previous local session)
U.S. stocks traded at record highs on Monday afternoon as the Republican tax plan, which is set to cut corporate tax rates, moved closer to passage.
Earlier in the session, the Nasdaq surpassed the 7,000-point mark, while the S&P and the Dow reached record levels.
More Republicans said on Sunday they expected Congress to pass the tax bill this week, with a Senate vote set for Tuesday and President Donald Trump expected to sign the bill into law by the end of the week.
“This Congress has shown an inability to pass anything over the past five years,” said Michael O‘Rourke, chief market strategist at JonesTrading in Greenwich, Connecticut. “If a major piece of legislation is passed, you’d expect the markets to be happy.”
U.S. stocks have enjoyed a near year-long rally, with the benchmark S&P 500
.SPX and the blue-chip Dow Jones Industrial Average
.DJI set for their best year since 2013.
The bill proposes to cut corporate tax rates to 21 percent from 35 percent, which investors are betting will boost profits as well as trigger share buybacks and higher dividend payouts.
Another expected outcome of lower taxes is cash repatriation, which market analysts say could boost mergers and acquisitions.
The Dow Jones Industrial Average
.DJI rose 138.24 points, or 0.56 percent, to 24,789.98, the S&P 500
.SPX gained 15.96 points, or 0.60 percent, to 2,691.77 and the Nasdaq Composite
.IXIC added 58.27 points, or 0.84 percent, to 6,994.85.
Besides the three indexes, the Nasdaq 100 .NDX and the S&P 100 .OEXA also hit record intraday highs.
The materials index .SPLRCM gained 1.4 percent, the most among the major 11 S&P sectors. The utilities index .SPLRCU was the lone decliner, with a drop of 0.9 percent.
Source: Netwealth Morning Business Roundup
Egg and Spinach Toasties for breakfast along with freshly squeezed orange juice.
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Happy Trading!
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