Afternoon trading August 19

Thanks Bowser and morning crew.


Half-time round-up:

Aussie stocks rebounded from ten-week lows as Asian markets, US index futures and crude oil all rose.

The ASX 200 rallied 57 points or 0.9 per cent to 6462 by mid-session, led by gains in banks, tech stocks and select defensive sectors. A new week brought signs of fresh optimism following a torrid two weeks on global markets. The benchmark Australian index shed 2.7 per cent last week as recession fears swept trading rooms.

The late pick-up in sentiment on Wall Street on Friday continued this morning. S&P 500 index futures advanced 15 points or 0.5 per cent after China announced over the weekend plans to reform its interest rate-setting mechanism. That helped lift the Shanghai Composite 0.7 per cent this morning. Other Asian markets also rose. Hong Kong's Hang Seng put on 1.8 percent and Japan's Nikkei 0.5 per cent.

Additional signs of improved appetite for risk included gains in crude oil and a decline in gold. Brent crude improved 61 cents or 1 per cent to $US59.25 a barrel. Gold retreated $4.20 or 0.3 per cent to $US1,519.40 an ounce.

Back home, tech stocks were the best-performing sector - another sign that traders hope the worst of the global retrace is behind. Market darling Afterpay advanced 3.2 per cent, Appen 4.8 per cent and Altium 2.8 per cent.

Energy stocks caught an uplift from strength in crude. Beach Energy led the gains with a rise of 8.3 per cent after announcing its underlying full-year net profit increased by 86 per cent to $560 million. Santos added 1.5 per cent and Woodside 1.2 per cent.

Interest in key defensive stocks suggested not all investors are convinced this retrace is over. Supermarket Woolworths put on 1.2 per cent, Coles 0.9 per cent and Goodman Group 2 per cent.

Mining majors BHP and Rio Tinto both gained 0.9 per cent. CBA was the pick of the banks, rebounding 1.4 per cent. ANZ added 1.3 per cent, NAB 0.8 per cent and Westpac 0.6 percent.

Gold miners were left behind by the change in sentiment. Regis Resources slid 4.1 per cent after reporting a net full-year profit after tax of $163.1 million. Saracen gave up 3.6 per cent, St Barbara 2.9 per cent and Newcrest 2.3 per cent.

What's hot today and what's not:

Hot today: Lendlease Group benefitted from muted expectations when it announced a 41 per cent slump in full-year after-tax profit to $467 million. The construction and property group has faced some highly-publicised troubles this year, including cost overruns on the NorthConnex M1/M2 Tunnel in Sydney and Gateway Upgrade North in Queensland, and backlogs on Melbourne's Metro Tunnel project and Sydney's WestConnex tunnels. Despite the profit decline, shares in the company bounced $1.45 or 10.7 per cent to $14.99.

Not today: a warning of weaker steel spreads this half helped send Bluescope Steel shares down $1.21 or 9.9 per cent despite a 17 per cent lift in underlying net profit after tax to $966.3 million. The company warned that it expected underlying earnings before interest and tax to fall 45 per cent on the same time last year, due to spread, currency factors and weaker market conditions. The news took the shine off a third successive year when underlying earnings before interest and tax topped $1.1 billion.

On currency markets, the dollar was trading broadly flat at just under 67.8 US cents.

Trading: the events of the last two weeks didn't half drive a truck through my watchlist. Had to scrub around two-thirds of it this morning and start reconstructing. That's where these threads come into their own. Half an hour poring over the forum and the watchlist was replenished. Solid return to trade this morning, thanks to NET. The share is clearly in a downtrend, but the intraday swings can be profitable. Began buying at 16c and continued down to a part-fill at 15c. Out at 16.5c. Also in and out of AZY for brokerage.