Interdum stultus opportuna loquitur...

Thursday, December 08, 2005

OzRant: Solid Until Lunchtime, Then SPLAT!

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

Well, it was only two days ago that I made it clear why the SPISpy e-mails were concentrating on the short side of the futures market: 

The market is going to struggle to hold any upside momentum - there is actually quite a lot of supply coming to market in the form of placements and secondary offerings. In addition to this impending supply overhang, the 'unnatural demand' of stock buyback cash is slowing, and short interest is also narrowing in some majors.

Personally, I think that's a reasonably cogent and easily understood set of sentences. I notice that a couple of brokerages mentioned it in their research distributions yesterday, which I think is interesting given that a couple of people from the brokerages in question are also subscribers. 

A couple of SPISpyers wondered why a reduction in short interest would lead to a lack of upside momentum/traction - and the answer is that one of the most potent sources of upside momentum is short-covering - when shorts are getting sharply gripped by the cruets, they tend to bail as quickly as they can, and buy without regard for the price they're paying. it's almost axiomatic that most new shorts are established near lows rather than highs, and that short interest evaporates closer to highs than it does to lows. 

So with a lot of short interest already covered, there's no 'price insensitive' source of buying. Maybe on Saturday I will open up the bits of the PRO site that deal with changes in Short Interest for shortable stocks - depends on what I can get done tomorrow.

Major Market Indices

The broad market - the ASX All Ordinaries (XAO) - had a bit of a swoon after lunch (the recent timeframe which has been very happy hunting for SPISpy viewers - alas no e-mail today). Between 1 p.m. and 4the close, the All Ords fell 40 points - and it finished the day down 44.70 points (-0.98%), finishing at 4531.60 points, which was also the session low (the SPI futures continued to tumble after the clsoe and fell all the way to 4560). The index hit an intraday high of 4576.30 (4576-ish) at the open.

Total volume traded on the ASX was 1.10 billion units, 3.7% above its 10-day average. Of the 483 stocks in the index, 198 fell while 74 managed a gain. Volume was tilted in favour of the losers by a margin of 1.9:1, with 338.60million shares traded in losers while 177.19million shares traded in the day's gainers ..

The Index that forms the cash basis for the SFE's Share Price Index Futures - the S&P/ASX 200 (XJO) - fell by 45.90 points (-0.99%), finishing at 4578.00 points. As I mentioned above ,the SPI kept falling after the cash markets closed.

The "heavy hitters" of the Australian market - the ASX 20 Leaders (XTL) - fell by 26.90 points (-1.09%), finishing at 2449.90 points. Only 2 index components - Wesfarmers and Fosters' - finished the day with a gain; the other and 18 index components fell out of bed during the afternoon selloff. Total volume in rising issues within the ASX20 amounted to just 7.56 million units while volume in the losers totalled 109.14m units.

The full stats on the winners in the "big guns":

  • Wesfarmers (WES), +$0.150 (0.42%) to $35.650 on volume of 1.62m shares; and
  • Foster's Group (FGL), +$0.010 (0.18%) to $5.560 on volume of 5.93m shares.

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

  • Woodside Petroleum (WPL), -$1.280 (3.45%) to $35.800 on volume of 2.33m shares;
  • Westpac Banking Corporation (WBC), -$0.43 (1.95%) to $21.62 on volume of 4.51m shares;
  • Rinker Group (RIN), -$0.30 (1.87%) to $15.74 on volume of 1.66m shares;
  • Australia and New Zealand Banking Group (ANZ), -$0.42 (1.79%) to $23.03 on volume of 4.71m shares;
  • Alumina (AWC), -$0.10 (1.45%) to $6.78 on volume of 6.24m shares.

At the smaller end of the market's capitalisation scale, the ASX Small Ordinaries Index (XSO) fell by 27.60 points (-1.06%), finishing at 2569.20 points. The major winners in the "pop-guns" were -

  • Austral Coal (AUO), +$0.180 (15.38%) to $1.350 on volume of 4,000 shares;
  • Lynas Corporation (LYC), +$0.010 (6.67%) to $0.160 on volume of 762,000 shares; and
  • Croesus Mining (CRS), +$0.015 (5.45%) to $0.290 on volume of 3.46m shares; and
  • Iinet (IIN), +$0.090 (5.42%) to $1.750 on volume of 1.15m shares; and
  • Globe International (GLB), +$0.015 (5.36%) to $0.295 on volume of 96,000 shares.

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

  • Volante Group (VGL), -$0.050 (6.94%) to $0.670 on volume of 1.65m shares;
  • Kagara Zinc (KZL), -$0.140 (6.8%) to $1.920 on volume of 1.46m shares; and
  • Infomedia Ltd (IFM), -$0.030 (5.94%) to $0.475 on volume of 509,000 shares; and
  • Pacifica Group (PBB), -$0.105 (5.5%) to $1.805 on volume of 960,000 shares; and
  • Silex Systems (SLX), -$0.120 (5.17%) to $2.200 on volume of 362,000 shares.
Index Changes
XAOAll Ordinaries4531.6-44.7-0.98%602.7m
XTLS&P/ASX 202449.9-26.9-1.09%0
XFLS&P/ASX 504477.4-45.1-1%223.89m
XTOS&P/ASX 1003717.7-36.9-0.98%402.42m
XJOS&P/ASX 2004578-45.9-0.99%489.8m
XKOS&P/ASX 3004571.1-45.7-0.99%0
XMDS&P/ASX Mid-Cap 504635-41.2-0.88%0
XSOS&P/ASX Small Ordinaries2569.2-27.6-1.06%184.95m

All Ordinaries Market Internals

Market Breadth
Advancing Volume7.56m120.56m149.24m177.19m82.24m413.45m
Declining Volume109.14m238.7m293.52m338.6m72.84m509.52m

S&P/ASX200 GICS Sector Indices

The top sector for the day was XUJ Utilities which gained 0.17% to 5432.90 points. The sector was helped by

  • Envestra (ENV), +$0.010 (0.89%) to $1.135 on volume of 845,000 shares;
  • Alinta (ALN), +$0.030 (0.28%) to $10.720 on volume of 503,000 shares;
  • Australian Pipeline Trust (APA), +$0.010 (0.26%) to $3.850 on volume of 158,000 shares;
  • Energy Developments (ENE), +$0.010 (0.25%) to $3.960 on volume of 404,000 shares; and
  • Australian Gas Light Company (AGL), +$0.020 (0.12%) to $16.200 on volume of 1.11m shares.

Second in the sector leadership stakes was XPJ Property Trusts which gained 0.11% to 1860.70 points. The sector leaders were -

  • Stockland (SGP), +$0.050 (0.78%) to $6.450 on volume of 7.58m shares;
  • Multiplex Group (MXG), +$0.020 (0.59%) to $3.390 on volume of 3.92m shares;
  • General Property Trust (GPT), +$0.020 (0.52%) to $3.880 on volume of 6.06m shares;
  • Macquarie Ddr Trust (MDT), +$0.005 (0.44%) to $1.150 on volume of 9.24m shares; and
  • Galileo Shopping America Trust (GSA), +$0.005 (0.43%) to $1.165 on volume of 23.54m shares.

There was no bronze medal today - the third-placed sector (XTJ Telecommunications) fell 0.52% to 1410.30 points.

The worst-performed sector today was XEJ Energy which lost 2.42% to 10572.40 points. The sector was dragged lower by Woodside (I mentioned the other day that it was nearly time to buy puts or sell covered calls in WPL< but I forgot to prepare anything for distribution). other majors in the energy sector also dragged it down - the five worst performers today were
  • Caltex Australia (CTX), -$0.760 (3.65%) to $20.080 on volume of 663,000 shares;
  • Woodside Petroleum (WPL), -$1.280 (3.45%) to $35.800 on volume of 2.33m shares;
  • Arc Energy (ARQ), -$0.060 (3.32%) to $1.745 on volume of 525,000 shares;
  • Roc Oil Company (ROC), -$0.070 (2.68%) to $2.540 on volume of 1.41m shares; and
  • Santos (STO), -$0.290 (2.46%) to $11.500 on volume of 2.19m shares.

Just in front of last place on the sector table was XHJ Healthcare which lost 1.72% to 6118.40 points. The sector was pulled down by

  • Novogen (NRT), -$0.260 (4.9%) to $5.050 on volume of 116,000 shares;
  • Chemeq (CMQ), -$0.035 (4.14%) to $0.810 on volume of 320,000 shares;
  • Resmed Inc (RMD), -$0.170 (3.09%) to $5.330 on volume of 907,000 shares;
  • Sonic Healthcare (SHL), -$0.410 (2.74%) to $14.580 on volume of 552,000 shares; and
  • Peptech (PTD), -$0.035 (2.51%) to $1.360 on volume of 543,000 shares.
Sector Indices
CodeGICS SectorClose+/-%Volume
XPJProperty Trusts1860.72.10.11%122.07m
XSJConsumer Staples5815.3-37.4-0.64%27.88m
XDJConsumer Discretionary2216.4-19.2-0.86%28.85m
XIJInformation Technology438.2-4-0.9%11.08m
XXJASX200 Financials ex Property Trusts5542.6-69.6-1.24%53.47m

All Ordinaries Major Movers

All Ords Volume Leaders
TLSTelstra Corporation3.82-0.01-0.26%44.07m
LHGLihir Gold2.170.062.84%37.03m
GSAGalileo Shopping America Trust1.170.010.43%23.54m
SGTSingapore Telecommunications2-0.01-0.5%16.4m
BHPBHP Billiton21.56-0.25-1.15%14.11m
All Ords Percentage Gainers
TIRTitan Resources0.0630.0058.62%2.31m
ARAAriadne Australia0.450.037.14%780595
LYCLynas Corporation0.160.016.67%762000
HHLHunter Hall International7.240.446.47%10903
All Ords Percentage Decliners
VGLVolante Group0.67-0.05-6.94%1.65m
IFMInfomedia Ltd0.48-0.03-5.94%509421
PBBPacifica Group1.81-0.11-5.5%960263
SLXSilex Systems2.2-0.12-5.17%361754

Elsewhere in the Region...

Regional Indices
New ZealandNZSE503229.9842.410.07%26.69m
JapanNikkei 22515284.88-199.78-1.29%0
SingaporeStraits Times2303.03-8.78-0.38%0
Hong KongHang Seng14942.91-192.04-1.27%184.75m
MalaysiaKLSE Comp893.061.390.16%0