License article

Markets Live: Shares close above 5000

Show comments

Here's what you need to know this evening:


  • The ASX200 and the All Ords both rallied above 5000 points
  • The dollar rises to $US1.0337, 96.2 yen and 76.9 euro cents
  • The Nikkei slumped 1.2%, the Kospi rallied 1.6%, Chinese markets closed
  • Spot gold was flat at $US1649.83, while WTI oil was lower at $US97.63
  • Wall Street futures are minimally higher, while FTSE100 is 0.1% lower



  • Eurozone industrial production December; est: 0.2% m/m

Tomorrow's earnings (and estimates)

  • Downer EDI; est: $81.98 million
  • Dexus Property Group; est: $367.80 million
  • GPT Group; est: $216.10 million
  • Mirvac Group; est: $186.63 million
  • Paladin Energy; est: $29.5 million
  • Rio Tinto; est: $3.06 billion
  • Wesfarmers; est: $1.28 billion

All earnings are interim results except for Rio Tinto, which is a full-year report. The estimates are courtesty of S&P Capital IQ.

The ASX200 has not closed above 5000 points since April 2010, while the All Ordinaries has not closed above 5000 since since April 2011.

While a string of positive profit results helped along today’s rise, many other index heavyweights are yet to report, CMC Markets senior trader Tim Waterer notes.

‘‘For the market to consolidate and get comfortable above 5000, we need to see a trend and some follow up acts from some of the other key blue-chip stocks,’’ he says. ‘‘CBA had a great result but ANZ might come out on Friday and have a sub-par result.’’

Here's how the big companies that reported today closed:

  • Ansell: -5.7% to $15.94
  • Boral: +1% at $4.92
  • CBA: +2.4% to $67.11
  • Computershare: -0.2% to $10.05
  • -4.55% to $8.40
  • Leighton: +11.2 to $23.14
  • Oz Minerals: +3.6% to $7.47
  • Stockland: +5.2% to $3.66
  • WorleyParsons: +1.8% to $25.82


For an overview of today's earnings scroll down to 9.47am. And for full coverage, click here.


The Australian dollar rallied sharply from four-month lows today, aided by some upbeat domestic data and strength in domestic shares and global commodity prices.

The Aussie was last buying $US1.0349, rebounding from $US1.0227 touched overnight, its lowest since mid-October.

Yet the dollar trimmed gains on the yen, falling to 96.17 yen from a high of 96.87 yen on Tuesday, after a G7 official voiced concerns about excessive movements in Japan's currency.

"Positioning was the main driver," said a trader at a European bank in Singapore. Many in the market had been short of the Aussie given it had been slipping for more than two weeks.

Among the major sectors, materials rallied 1.2 per cent, financials jumped 1.4 per cent - driven by gains in CBA - and industrials added 1.2 per cent.

Gold stocks lost 0.4 per cent and IT was down 1.3 per cent.

Back to top

The market has managed to close above 5000 points. The benchmark S&P/ASX200 index jumped 44.7 points, or 0.9 per cent, to 5003.7, while the broader All Ords index rose 43 points, or 0.9 per cent, to 5024.5.


Despite today's rally, investors aren't getting carried away by the ASX200’s gain, instead exercising a fair bit of caution as they dip their toes back into the equities market, JBWere executive director Mike Kendall says:

  • It’s a question of balance. People are getting a bit more confident so they are putting a bit more money back in the market. But I think most investors have their feet firmly planted on the ground and are playing their cards very carefully at the moment.
  • [Investors] are putting a little bit in and then standing back and watching. I don’t think there’s anyone running around being a wild cowboy in this market. I think there has been to many lessons in the past three or four years.
  • The increasing  level of confidence about reduced risks in the global economy has led investors to move some of their money away from low-yielding returns such as cash and bonds.
  • The start of the earnings season so far has also shown that Australian companies are delivering fairly solid levels of profitability in the main.

If the trading patterns on the ASX for Monday and Tuesday were timid, today was anything but, says CMC Markets trader Tim Waterer:

  • The bumper CBA profit effectively signalled a buying green light for traders today and the result was an emphatic push through the 5000 mark by the ASX200.
  • The buzz stemming from the CBA numbers seemed to proliferate into the broader market with investors buoyed by the profit achievements of one of our banking pillars.
  • And while many traders had been anticipating a solid dividend increase the actual amount announced by CBA could be classed as a considerable over-deliverance. As a consequence, none of the big four banks were short of buying attention today.
  • So while there was seemingly nothing but blue skies on the Australian market today, it is prudent to remember that we are still awaiting profit results from many other index heavyweights.

The major banks are all continuing to struggle with achieving the satisfaction results that they are seeing from their personal customers, says Roy Morgan Research director Norman Morris.

‘‘Despite four official reductions in the cash rate over the last 12 months, business customers of all banks are less satisfied than they were a year ago,’’ he notes.

The satisfaction of Westpac business customers increased to 67.9% in January 2013 (up from 67.7% in December 2012) while the satisfaction with the other three majors declined. This increased Westpac’s lead over its nearest Big Four competitor, the CBA on 63.5%.

These are the latest findings from the Roy Morgan Business Single Source survey which conducts over 30,000 interviews with business decision makers every year.

US news

During his State of the Union address, US President Barack Obama called for talks on a far-reaching free trade agreement with the 27 nations of the European Union, throwing his weight behind a deal that would encompass half the world's economic output.

The United States and the EU already have the largest economic relationship in the world, and one of the most complicated. A pact would unite the United States, the world's largest economy, with four other countries in the top ten: Germany, France, Britain and Italy.

Faced with slow growth on both sides of the Atlantic and rising competition from China and other emerging economies, the long-time allies in late 2011 began looking at ways to build on their existing relationship.

Back to top

While most of the attention has been on the sharemarket today, the dollar has quietly risen a cent.

Noni B is confident of an earnings turnaround and will continue to open new stores, despite a drop in first half profit and aggressive discounting in the retail sector.

The women’s retail fashion group on Wednesday reported a net profit of $1.9 million for the first half of its financial year to December 30, down from $2.4 million in the previous corresponding first half.

Noni B opened a new store each in Sydney, Melbourne, Brisbane, and Perth in December and closed one unprofitable store.

Joint managing director David Kindl said greater revenues would be recorded as the stores notched up sales.

Shares are up 3.9 per cent to 80.5 cents.

So we've been looking back at the history of the ASX a lot today and thought we'd include one more interesting graphic whichs tracks the ASX since its inception.


Some more on CBA: CEO Ian Narev's strategy demonstrates he is prepared to sacrifice some market share in order to win back some margin, Elizabeth Knight writes:

CBA is the largest of the Australian banks and beats its three major competitors on a range of measures including the all important return on equity.

However, the CBA has posted below average growth in both retail deposits and home loans, rather than become too immersed in intense competition with NAB, Westpac and ANZ.

The CBA is not the price maker in the sustained grab for deposit funds. Its loans to customers are already 63 per cent funded by deposits.

More importantly, the recent fall in the cost of wholesale funding means it is now a vastly cheaper source of funding than deposits.

The funding mix is part of the reason the intensely scrutinised margin between the cost at which CBA borrows and the cost at which it lends - the net interest margin - has improved over the previous six months.

Here's the full article


The bullish ASX is a consequence of money flowing back into the equity market - where you "get the best bang for your buck", says EL & C Baillieu Stockbroking director Richard Morrow:

  • It's a classic re-weighting of the relationship between the investment returns available through fixed interest, and the investment returns available through the equity market.
  • Ten-year bond yields in Australia fell to a low of about 2.6 to 2.7 per cent in June and July of last year. And the market’s rallied since then.
  • Today, months later ... the bond yields have got back up again, the yield curve has turned positive, and 10-year-bonds are yielding about 3.4 per cent.
  • Equities, especially high-dividend paying blue-chip equities like banks - the dividend yields are just becoming very desirable because of the relative rate of return, especially on an after-tax basis.
Back to top

Mal Maiden on today's share rally.

ASX hits new heights

The S&P ASX 200 index touches 5,000 points for the first time since April 2010.

US news

With Barack Obama in the middle of his State of the Union address, we thought we'd give you some interesting market news from the US.

USA TODAY markets reporter Matt Krantz answers a different reader question every weekday, here's a good one from a couple days ago.

Q: Are gun stocks good investments now that the government is trying to limit weapons? 

A: Guns have become a public enemy ever since the shootings at Sandy Hook Elementary in Newtown, Conn. But on Wall Street, they’re winning more friends than ever.

Shares of gun stocks continue to move higher this year, extending their rallies in 2012, as investors expect revenue to soar as gun owners stock up.

Shares of Smith & Wesson (SWHC) are up more than 8% this year and have doubled over the past year.

Meanwhile, shares of Sturm Ruger (RGR) have added 17% this year and are up more than 28% over the past 12 months.

Investors are piling into the gunmakers’ shares despite the proposal of tighter gun control laws, which call for greater scrutiny of gun sales, in addition to a ban on highly profitable assault rifles.

The reason: The specter of tighter rules is prompting anyone who thought they might buy a gun to get it now.  And the gunmakers are certainly getting a short-term bump due to the spike in gun demand.

Revenue at Smith & Wesson jumped 48% during the October 2012 quarter, the latest available, and revenue at Sturm Ruger rose 47% in the quarter ended September.

Investors, though, should be careful about jumping in.

While the stock looks cheap based on its current clip of sales, investors need to remember consumers’ mad dash to buy guns may be temporary and might actually be stealing away future sales. 

It should come as no surprise, but Bell Potter is crowing over the ongoing strength in CBA’s share price, and also the dividend hike today, since it was one of the few - if not the only - broker willing to call the stock a ‘buy’ ahead of today’s results, while also tipping a higher payout.

‘‘For the last $20 CBA has rallied, our positive stance has been countered by endless analysis pointing to CBA’s expensive valuation. We consistently said we disagreed,’’ the broker’s commentator Charlie Aitken told clients in a note earlier today.

‘‘When you run through the $3.7 billion of cash profits CBA made ... and you look at the drivers of them it becomes even clearer that NPAT growth and dividend growth will continue.’’


Commonwealth Bank chief executive Ian Narev has conceded that some people will see the bank's latest profit result as excessive, after lenders' refusal to pass on recent cuts to the cash rate in full to borrowers, writes BusinessDay's Clancy Yeates.

The country’s biggest lender said cash earnings grew by 6 per cent to $3.78 billion profit in the latest half, helped by a strong performance in its flagship retail business that offers home loan and deposit accounts.

Profit margins also widened over the six month to December, as wholesale funding costs fell and it passed only part of the 0.5 percentage point cut in interest rates.

Shares are up 2.4 per cent to $67.11.


Click here for the full story.

shares up

The ASX200 has reached its highest point since September 2008, writes BusinessDay's Max Mason, but it has a way to go before it reaches pre-GFC levels.

From May 2008 to September 2008, the ASX200 dropped more than 900 points. By March 2009 it had fallen to a low point of 3145.5.

It's currently sitting just above 5000 points, and is more than 1800 points off its all time high of 6828.7, which was reached in November 2007.

The graphic below puts the market's numbers into perspective a bit ... though that's not to try and take anything away from this latest surge.


Back to top