Day Trading Pre Open - 13 December 2018

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The Australian share market has closed higher, buoyed by a surge in banking and energy stocks as trade tensions ease and investors cash in on cheaper shares.

The benchmark S&P/ASX200 index was up 77.6 points, or 1.39 per cent, at 5653.5 on Wednesday, while the broader All Ordinaries rose 1.35 per cent.

Risk appetite got a boost on Wednesday after US President Donald Trump said trade talks with Beijing were already underway, with more meetings likely among US and Chinese officials.

Pepperstone head of research Chris Weston said the "crazy cheap" position of the market combined with this easing of hostility was attractive to buyers.

"That has given us some belief that perhaps they can converge and maybe we can realise some of this value that's on offer and have some confidence that the earnings (on the market) is correct," he told AAP.

Higher oil prices also helped the energy stocks to a sector-wide rise of more than two per cent, with Origin up 3.6 per cent to $7.11, while Caltex, Woodside and Oil Search rose between 1.8 and 2.3 per cent.

The financials were lower early but rose consistently throughout the day to record a two per cent gain.
Commonwealth Bank was 2.4 per cent stronger at $70.08, while NAB and ANZ were both 1.7 per cent higher.
Westpac was the weakest of the big four lenders but still rose 1.6 per cent to $25.47 despite shareholders handing the bank a first strike on executive pay in protest over bonus cuts they say did not go far enough.

The major miners were also buoyant following another rise in copper prices, BHP rose 1.5 per cent to $32.19 and Rio Tinto up 1.7 per cent to $74.10.
South32 and BlueScope were up 2.9 per cent and 4.7 per cent.

Precious metal prices were largely unchanged but gold miners were weaker, with St Barbara and Regis losing 3.7 and 3.1 per cent.

Tech stocks had the strongest percentage lift, with Afterpay Touch, Altium, Xero and Computershare gaining between 3.2 and 5.5 per cent

Biotech CSL rose 1.3 per cent and ResMed continued its strong run to lift the healthcare sector with a gain of 1.3 per cent to $15.80.

Sonic Healthcare shares were in a halt for a capital raising to fund the $A750 million ($US540 million) acquisition of US pathology services firm Aurora Diagnostics, a deal it says will create one of the largest pathologist groups in the world.

Telcos were the only sector to close in the red, dragged down by Telstra's 1.3 per cent drop to $3.03.

The Australian dollar edged higher with global equities as tentative signs of easing China-US trade tensions whetted risk appetite.
The Aussie was buying 72.13 US cents at 1630 AEDT, up from 72.04 US cents cents on Tuesday.

ON THE ASX:
* The benchmark S&P/ASX200 index closed up 77.6 points, or 1.39 per cent, at 5653.5
* The All Ordinaries was up 76.1 points, or 1.35 per cent, at 5727.3
* At 1630 AEDT, the SPI200 futures index was up 62 points, or 1.11 per cent, at 5654

CURRENCY SNAPSHOT AT 1630 AEDT:
One Australian dollar buys:
* 72.13 US cents, from 72.04 US cents on Tuesday
* 81.82 Japanese yen, from 81.48
* 63.66 euro cents, from 63.38
* 57.65 British pence, from 57.26
* 104.76 NZ cents, from 104.72

GOLD:
The spot price of gold in Sydney at 1630 AEDT was $US1244.7 per fine ounce, from $US1246.68 on Tuesday.

U.S. stocks jumped about 1.6 percent on Wednesday, bolstered by the technology sector, as signs Beijing would ease its “Made in China 2025” industrial policy added to optimism fueled by President Donald Trump’s upbeat comments on trade talks.

Trump, in an interview with Reuters, said trade talks were already underway and that China was buying a “tremendous amount” of U.S. soybeans.
China, the largest buyer of U.S. soy, made the first major U.S. soybeans purchase on Wednesday, since Washington and Beijing agreed to a temporary trade truce earlier this month, Reuters reported.

Trump also said he would intervene in the case against a top executive at Huawei Technologies if it would help secure a trade deal.

“Sentiment is driven by positive news that there might be progress with U.S. and China negotiations - which, I think, will be the number 1 headline for the next three months,” said Tom Plumb, president of Plumb Funds in Madison, Wisconsin.

The S&P technology sector .SPLRCT gained 2.21 percent, providing the biggest support to the market. The sector, which is heavily exposed to China, is among the most beaten-down this quarter.

Another trade-sensitive sector, industrials .SPLRCI, rose 1.89 percent on strength in Caterpillar Inc (CAT.N) and Boeing Co (BA.N).

However, Plumb said he would not be surprised to see the market drift again around afternoon, in line with recent trend.

“We are seeing some year-end positioning. Many people who bought into the stock market into the fall have significant losses on their portfolio and they will probably put some selling pressure,” Plumb said.

Trading has been especially choppy in the past two days amid a slew of headlines on topics ranging from trade to Britain’s planned divorce from the European Union and a U.S. government shutdown.

A potential source of worry for market participants is the result of a no-confidence vote against British Prime Minister Theresa May at 2100 GMT (4 p.m. ET), though a growing number of Conservative lawmakers have indicated support.

At 12:55 a.m. EDT the Dow Jones Industrial Average .DJI was up 410.12 points, or 1.68 percent, at 24,780.36, the S&P 500 .SPX was up 44.60 points, or 1.69 percent, at 2,681.38 and the Nasdaq Composite .IXIC was up 154.87 points, or 2.20 percent, at 7,186.70.

The other big boost came from a more than 2-percent gains in health .SPXHC and consumer discretionary .SPLRCD stocks.

Christopher Larkin, senior vice president of trading at E-Trade Financial in New York, said his retail clients were using the recent dips as an opportunity to pick up some bargains.

The laggards were the defensive consumer staples .SPLRCS, utilities .SPLRCU and real estate .SPLRCR sectors.

China-based music streaming company Tencent Music Entertainment (TME.N) jumped 8.69 percent in its U.S. debut.

Advancing issues outnumbered decliners by a 3.63-to-1 ratio on the NYSE and a 3.35-to-1 ratio on the Nasdaq.

The S&P index recorded 14 new 52-week highs and five new lows, while the Nasdaq recorded 18 new highs and 117 new lows.

Source: Netwealth Morning Business Roundup

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