Interdum stultus opportuna loquitur...

Monday, June 27, 2005

OzRant: Call That A Bounce? Pshaw....

Note - from June 24th 2009, this blog has migrated from Blogger to a self-hosted version. Click here to go straight there.

Friday's OzRant speculated that today ought to have seen a bounce, given Friday's tilted advance-decline volume stats. The poor performance of US markets on Friday night should have made sensible folks delay their bounce expectations until after an opening pop downwards.

And that proved to be the most sensible thing to do - to wait for the over-reaction to Friday's US numbers, then buy for the bounce. The dip is easy enough to explain: it's caused by index-arbitrage.

Index-arb goes a bit like this: the SPI was down on Friday night, so at the open there exists a disequilibrium between stocks and the SPI. The sensible thing to do then, is to sell stocks and buy the SPI - locking in the arb differential. Stocks therefore get dragged down even as the SPI starts to correct up, and eventually they both meet somewhere in the middle and then the day goes on as previously expected.

Anyhow - after eliminating the SPI-disequilibrium, stocks bounced, but it was the lamest-assed bounce you ever saw. think of how awful Bush looked in the debates with Al Gore, and that gives you some idea of how lacklustre the bounce was.

I mean seriously. It was Monday (always good for a modest upward bias), and Friday had awful A/D characteristics (always good for a reactive move the following sessions). the ducks appeared to line up reasonably well - and yet the bounce - when it happened - was tedious.

Major Market Indices

The broad market - the ASX All Ordinaries- fell by 12.60 points (-0.30%), finishing at 4191.20 points. The opened at Friday's closing number (4203.80), which turned out to be the session high (and as usual, was a statistical fiction - the index almost always opens at its previous close). Within 15 minutes the All Ords had dropped to 4183.7, and that turned out to be the low of the day. The bounce from there was very interesting for about eight minutes (during which time the All Ords added 10 points) but it then went basically nowhere for the remainder of the session; 4200 served as concrete resistance, and the index closed below its 11:00 a.m. level.

Total volume traded on the ASX was 930 million units, 4.5% below its 10-day average. Of the 483 stocks in the All Ords index, 250 fell while 134 managed a gain. Volume was tilted in favour of the losers by a margin of 2.8:1, with 351.72 million shares traded in losers while 123.73million shares traded in stocks that ended the day in the green.

The Index that forms the cash basis for the SFE's Share Price Index Futures - the S&P/ASX 200 - fell by 14.40 points (-0.34%), finishing at 4231.20 points. Almost 60% of the stocks in the index were in the red by the close.

The "heavy hitters" of the Australian market - the ASX 20 Leaders - fell by 11.70 points (-0.51%), finishing at 2275.20 points. Within the index members, there were just 2 that rose (Woodside and St George Bank), and 18 losers. Total volume in rising issues within the ASX20 amounted to 2.12 million shares while volume in the losers totalled 102.21 m units. Now that's what I call an arse-kicking, volume-wise.

The only winners in the "big guns" were -

  • Woodside Petroleum (WPL), +$0.54 (1.86%) to $29.54 on volume of 1.49m shares; and
  • St George Bank (SGB), +$0.01 (0.04%) to $25.80 on volume of 628,000 shares.

The following stocks made up the biggest percentage losers in the big-guns:

  • Foster's Group (FGL), -$0.10 (1.85%) to $5.31 on volume of 5.93m shares;
  • AMP Limited (AMP), -$0.12 (1.82%) to $6.48 on volume of 14.43m shares; and
  • Alumina (AWC), -$0.09 (1.58%) to $5.59 on volume of 3.07m shares; and
  • Amcor (AMC), -$0.09 (1.3%) to $6.85 on volume of 4.77m shares; and
  • QBE Insurance Group (QBE), -$0.16 (0.99%) to $16.00 on volume of 1.39m shares.

At the smaller end of the market's capitalisation scale, the ASX Small Ordinaries Index fell by 1.30 points (-0.06%), finishing at 2345.20 points. The major winners in the "pop-guns" were -

  • Sydney Gas Ltd (SGL), +$0.07 (15.29%) to $0.49 on volume of 4.6m shares;
  • Miller's Retail (MRL), +$0.07 (9.93%) to $0.78 on volume of 4.97m shares; and
  • Village Life Ltd (VLL), +$0.03 (9.84%) to $0.34 on volume of 9.08m shares; and
  • Antares Energy (AZZ), +$0.04 (8.14%) to $0.47 on volume of 582,000 shares; and
  • Tap Oil (TAP), +$0.17 (7.46%) to $2.45 on volume of 1.96m shares.

The losingest-little-guys for the session were (in order of decline):

  • Mosaic Oil (MOS), -$0.01 (6.06%) to $0.16 on volume of 4.51m shares;
  • AAV (AVV), -$0.08 (5.82%) to $1.30 on volume of 113,000 shares; and
  • Sunland Group (SDG), -$0.09 (5.18%) to $1.56 on volume of 225,000 shares; and
  • Equigold (EQI), -$0.06 (5.14%) to $1.02 on volume of 239,000 shares; and
  • Agenix (AGX), -$0.02 (5.08%) to $0.28 on volume of 807,000 shares.
Just a reminder - to examine the recent announcements that may have driven today's price moves, click on the company's ASX code in the lists.
Index Changes
XAOAll Ordinaries4191.2-12.6-0.3%576.85m
XTLS&P/ASX 202275.2-11.7-0.51%104.32m
XFLS&P/ASX 504180.6-15.1-0.36%192.34m
XTOS&P/ASX 1003438.5-12.7-0.37%323.82m
XJOS&P/ASX 2004231.2-14.4-0.34%413.24m
XKOS&P/ASX 3004222.9-14.3-0.34%0
XMDS&P/ASX Mid-Cap 504057.3-16.2-0.4%0
XSOS&P/ASX Small Ordinaries2345.2-1.3-0.06%172.9m

All Ordinaries Market Internals

Market Breadth

Advancing Volume2.12m46.54m76.49m123.7350.08266.59
Declining Volume102.21m251.72m285.55m351.7283.14515.54

S&P/ASX200 GICS Sector Indices

The top sector for the day was Energy which gained 2.28% to 9561.20 points - record-setting oil markets will do that (front-month Crude Oil is up almost 50¢ during the NYMEX ACCESS overnight session as I type this). The sector was helped by

  • Tap Oil (TAP), +$0.17 (7.46%) to $2.45 on volume of 1.96m shares;
  • Oil Search (OSH), +$0.13 (4.51%) to $3.01 on volume of 9.28m shares; and
  • Arc Energy (ARQ), +$0.08 (4.23%) to $1.97 on volume of 744,000 shares; and
  • Roc Oil Company (ROC), +$0.08 (4.12%) to $2.02 on volume of 1.33m shares; and
  • Hardman Resources (HDR), +$0.08 (3.65%) to $2.27 on volume of 3.62m shares.

Second in the sector leadership stakes was Healthcare which eked out the slimmest of gains (0.03%) to close at 5150.90 points. The sector leaders were -

  • Peptech (PTD), +$0.03 (1.6%) to $1.59 on volume of 564,000 shares;
  • Sonic Healthcare (SHL), +$0.17 (1.38%) to $12.52 on volume of 248,000 shares; and
  • Cochlear (COH), +$0.37 (0.98%) to $38.01 on volume of 119,000 shares; and
  • Mayne Group (MAY), +$0.04 (0.84%) to $4.81 on volume of 2.55m shares; and
  • CSL (CSL), +$0.07 (0.21%) to $32.64 on volume of 561,000 shares.

No bronze today - the third-placed Utilities index actually lost 0.03% (i.e., a bee's thingy) to 4956.00 points.

The worst-performed sector today was the fluff-ridden 'beta-hive' - Information Technology - which lost 1.13% to 385.50 points. The sector was dragged lower by
  • IRESS Market Technology (IRE), -$0.15 (3.56%) to $4.06 on volume of 56,000 shares;
  • Infomedia Ltd (IFM), -$0.02 (2.86%) to $0.51 on volume of 1.17m shares;
  • ERG (ERG), -$0.01 (2%) to $0.25 on volume of 4.15m shares;
  • Vision Systems (VSL), -$0.02 (1.69%) to $1.16 on volume of 134,000 shares; and
  • Computershare (CPU), -$0.08 (1.34%) to $5.90 on volume of 2.84m shares.

Just in front of last place on the sector table was Property Trusts which lost 0.82% to 1773.00 points. The sector was pulled down by

  • Macquarie Prologis Trust (MPR), -$0.04 (3%) to $1.13 on volume of 1.87m shares;
  • Mirvac Group (MGR), -$0.07 (1.97%) to $3.49 on volume of 6.85m shares; and
  • Multiplex Group (MXG), -$0.05 (1.84%) to $2.67 on volume of 6.04m shares; and
  • Macquarie Countrywide Trust (MCW), -$0.04 (1.81%) to $1.90 on volume of 4.06m shares; and
  • Stockland (SGP), -$0.09 (1.6%) to $5.54 on volume of 2.52m shares.
Sector Indices
CodeGICS SectorClose+/-%Volume
XDJConsumer Discretionary2226.9-2.3-0.1%51m
XXJASX200 Financials ex Property Trusts5130.8-24.4-0.47%58.19m
XSJConsumer Staples5563.1-44.3-0.79%32.68m
XPJProperty Trusts1773-14.7-0.82%103.31m
XIJInformation Technology385.5-4.4-1.13%8.95m

All Ordinaries Major Movers

All Ords Volume Leaders
BBBB Digital0.3950.0051.28%20.35m
TLSTelstra Corporation5.07-0.01-0.2%17.1m
AMPAMP Limited6.48-0.12-1.82%14.43m
MDTMacquarie Ddr Trust1.19-0.02-1.25%11.94m
PMNPromina Group4.67-0.09-1.89%9.54m
OSHOil Search3.010.134.51%9.28m

All Ords Percentage Gainers
SGLSydney Gas Ltd0.490.0715.29%4.6m
MRLMiller's Retail0.780.079.93%4.97m
VLLVillage Life Ltd0.340.039.84%9.08m
ADAAdacel Technologies0.270.028.16%205910
AZZAntares Energy0.470.048.14%582076

Just a quick note on MetalStorm (see below) that was one of the last stocks I ever made a recommendation on (back in the old days). Back then it was trading at about $1.20: the recommendaiton was a raging SELL, of course. Look at it now.

All Ords Percentage Decliners
ETWEvans & Tate0.31-0.09-22.5%4.51m
MSTMetal Storm0.11-0.015-12%1.24m
CBHCBH Resources0.23-0.03-11.76%3.97m
PNAPan Australian Resources0.24-0.02-7.69%4.68m

Elsewhere in the Region...

Japan's Nikkei 225fell 122.75 points (-1.06%) to close at 11414.28 points. The index opened with a gap down, opening at 11445.64 points. Usually a gap down is something to 'fade' if the index gives the slightest indication of stabilising, but today that wasn't the case (at least, the gap didn't close). The open turned out to be the session high.

The Nikkei dropped to test 11400 during the first half-hour of the morning session, and wiggled around 11400 right through to lunch. In the immediate post-prandial period (how's that for alliteration), 11400 continued to hold, until a micro-stagger just after 1 p.m. which took the index down to 11378.99 points (its low for the session).

The Kiwi Market advanced 26.32 points (0.84%); it has really had the bit between it's teeth recently. today it performed another one of its 'coast to coast' moves; opened at its low (3137.668 points), and closed at its high (3163.989 points).

A total of 17 stocks within the NZSE50 rose, with volume in advancers totalling 12.4 million units. Decliners numbered 21, and total volume traded in losers was 8.6 million shares. Individual stocks that aided the advance included...

  • Carter Holt Harvey (CAH), +NZ$0.28 (14.51%) to NZ$2.21 on volume of 8.2m shares;
  • The Warehouse Group (WHS), +NZ$0.28 (8.24%) to NZ$3.68 on volume of 303,000 shares;
  • NGC Holdings  (NGC), +NZ$0.22 (6.29%) to NZ$3.72 on volume of 44,000 shares;
  • Feltex Carpets  (FTX), +NZ$0.03 (6.25%) to NZ$0.51 on volume of 1.96m shares;
  • Auckland International Airport (AIA), +NZ$0.07 (3.18%) to NZ$2.27 on volume of 839,000 shares; and
  • Baycorp Advantage (BCA), +NZ$0.09 (2.81%) to NZ$3.29 on volume of 85,000 shares.

Like Japan's Nikkei, Hong Kong's Hang Seng index opened 'gap down' at 14142.14 (a gap of 88 points from Friday's close),but unlike the Nikkei, the HSI then absolutely charged towards closing the gap.

Although it never quite got the gap actually closed, it did manage to get back up past 14200 (to 1402.98, to be exact) in less than 20 minutes after the open (it's that index arb again).  By lunchtime it had softened again, holding on to a decline of 65.01 points (-0.46%) at 14165.28.

Within the Hang Seng, just 3 index components rose, while 28 stocks fell. Volume in the gainers in Hong Kong's big-cap index totalled 111million units, and total volume traded in losers was 65.4million shares. Individual stocks that contributed to the decline included...

  • Denway Motors (0203), -HK$0.08 (2.59%) to HK$2.83 on volume of 6.66m shares;
  • Li & Fung (0494), -HK$0.40 (2.52%) to HK$15.45 on volume of 1.58m shares;
  • China Unicom (0762), -HK$0.10 (1.53%) to HK$6.45 on volume of 4.24m shares;
  • Lenovo Group (0992), -HK$0.03 (1.09%) to HK$2.28 on volume of 2.08m shares;
  • Henderson Land (0012), -HK$0.40 (1.08%) to HK$36.60 on volume of 1.28m shares; and
  • Swire Pacific A (0019), -HK$0.75 (1.07%) to HK$69.25 on volume of 855,000 shares.
Regional Indices
New ZealandNZSE503163.98926.320.84%22.6m
JapanNikkei 22511414.28-122.75-1.06%0
SingaporeStraits Times2210.38-13.34-0.6%0
Hong KongHang Seng14165.28-65.01-0.46%182.94m
MalaysiaKLSE Comp890.61-7.47-0.83%0