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Overseas Market Report -U.S. Markets Close Higher on Financials, Tech Rally

Wednesday 28 June 2017 | Close

U.S. markets finished higher on Wednesday following a rally by financial and technology stocks, with the S&P 500 posting its largest one-day gain in two months and the Nasdaq Composite recording its best day in eight months.

Wednesday 28 June 2017 | Close

Foreign Equities Close Change %Change
Dow Jones (US) 21455 144 0.68
S&P 500 2441 21 0.88
NASDAQ 6234 88 1.43
FTSE 100 Index 7388 -47 -0.63
DAX 30 12647 -24 -0.19
CAC 40 5253 -6 -0.11
Nikkei 225 (Japan) 20130 -95 -0.47
HKSE 25684 -156 -0.61
SSE Composite Index 3173 -18 -0.56
NZ 50 7624 -2 -0.02

Wednesday 28 June 2017 | Close

Commodities US$ Close Change %Change
Aluminium /t 1891 14 0.76
Copper /t 5867 29 0.49
Nickel /t 9226 13 0.14
Gold /oz 1250 -1 -0.05
Silver /oz 16.8 0.1 0.79
Oil - West Texas crude /bbl 44.9 0.1 0.29
Lead /t 2284 11 0.48
Zinc /t 2735 -12 -0.45

Wednesday 28 June 2017 | Close

Currency Close Pts Change % Change
$A vs $US 0.7639 0.0054 0.72
$A vs GBP 0.5908 -0.0012 -0.20
$A vs YEN 85.79 0.70 0.82
$A vs EUR 0.6714 0.0023 0.35
$A vs $NZ 1.0452 0.0024 0.23
$US vs Euro 0.8788 -0.0030 -0.34
$US vs UK 0.7734 -0.0071 -0.91
$US vs CHF 0.9595 -0.0008 -0.08

U.S. markets finished higher on Wednesday following a rally by financial and technology stocks, with the S&P 500 posting its largest one-day gain in two months and the Nasdaq Composite recording its best day in eight months.

According to media reports, technology stocks, which had suffered a pullback in recent sessions, rebounded from lows, with the sector closing 1.4% higher.

At the closing bell, the Dow Jones, the S&P 500, and the Nasdaq were up 0.7%, 0.9%, and 1.4%, respectively.

Eldorado Gold (ELD) announced that unexpected gold grade and recovery issues at the leach pad at its Kisladag mine have led to production below expectations. Though the company will be able to make adjustments to improve output back up to expectations, the changes to the solution pad chemistry and stack height of the leach pad will take some time. As a result, Eldorado now expects Kisladag to produce 180,000 to 210,000 ounces of gold at cash costs of $450 to $500 per ounce, down from prior guidance of 230,000 to 245,000 ounces.

For Australian ADRs listed on the NYSE, BHP Billiton gained 105 cents (3.05%) to $35.46, ResMed rose 15 cents (0.19%) to $77.17, Telstra Corporation lifted 36 cents (2.20%) to $16.76, Spark New Zealand fell 9 cents (-0.64%) to $14.05, and Westpac gained 55 cents (2.40%) to $23.44.

At 8:00 AM (AEST), the 10-year Treasury note yield was 2.23% and the 5-year yield was 1.82%.

European markets fell on Wednesday, with the FTSE 100, the French CAC 40, and Germany's DAX down 0.6%, 0.1%, and 0.2%, respectively.

Asian markets also ended lower on Wednesday with the Hang Seng and the Shanghai Composite both down by 0.6%, and the Nikkei 225 down 0.5%. India's Sensex fell 0.4%.

Australian Market

Local Markets Expected to Open Higher

Ahead of the local open, SPI futures were 40 points higher at 5,736.

Wednesday 28 June - close. The Australian market started the day lower following a weak lead from the US market. However, the ASX 200 index gained momentum shortly after the open, with the upward trending continuing throughout the rest of the day to finish at its intraday high. Major gains were from resource stocks due to an overnight rally in commodity prices, while the big four banks only contributed a fraction of gains. Most sectors performed positively, with the only exception being industrials. The Australian dollar appreciated against the greenback and had mixed results against other major currencies.

The All Ordinaries added 43.60 points to 5,796.10 while the S&P/ASX 200 rose 41.50 points to 5,755.70.

Insurance Australia Group Limited (IAG)

Insurance Australia Group advised that, as part of its regular year end processes, it has just completed a preliminary review of prior period reserve releases for the financial year ended 30 June 2017 (FY2017). This preliminary review indicates an outcome equivalent to at least 5% of net earned premium (NEP). This compares to previously held guidance of at least 2% of NEP. The higher indicated outcome, compared to previous expectations, reflects further favourable experience against underlying assumptions for claim size and inflation. As a result of the expected increase in reserve releases, it has raised its reported margin guidance range for FY2017 from 10.5%-12.5% to 13.5%-15.5%. IAG gained 42 cents to $6.97.

Sirtex Medical Limited (SRX)

Sirtex Medical provided an update to the market of anticipated full-year dose sales growth and underlying constant currency EBITDA performance, along with a non-cash write-off of clinical and R&D assets and an organisational restructure resulting in a provision for costs related to reducing staff numbers. These measures are intended to reset its profitable core business for further global expansion. Worldwide dose sales of 12,590 were 5.5% higher compared with FY2016, with underlying constant currency EBITDA anticipated at $72m; both within previous guidance. From an initial reduction of $7m related to R&D and administration identified in February 2017, it is eliminating resource inefficiencies and focusing on the core business, which will result in headcount reductions of 15%. SRX soared $2.31 to $15.80.

Nine Entertainment Co. Holdings Limited (NEC)

Nine Entertainment Co. Holdings announced the government has made a regulation which will result in a reduction in the licence fee paid by Australia's commercial free-to-air television broadcasters from 3.375% to 0% for the FY2017 period. This will result in a reduction in licence fees accrued by the company in FY2017 and paid in FY2018 of $33m. At the time of its H1 FY2017 result in February 2017, the company guided to a full-year group EBITDA of $158m to $187m, being the range of equity analysts' forecasts at the time. In light of this announcement, and trading since the H1 result, FY2017 reported group EBITDA is expected to be between $200m and $210m. NEC added 6 cents to $1.39.

Annual General Meetings today (ASX 300)

  • No Annual General Meetings today

Companies trading ex-dividend today (ASX 300)

  • ALE Property Group
  • APA Group
  • Ardent Leisure Group
  • Arena REIT
  • Astro Japan Property Group
  • Aventus Retail Property Fund
  • Aveo Group
  • BWP Trust
  • Centuria Industrial REIT
  • Charter Hall Group
  • Charter Hall Long Wale REIT
  • Charter Hall Retail REIT
  • Cromwell Property Group
  • Dexus Prop
  • Folkestone Education Trust
  • Gateway Lifestyle Group
  • GDI Property Group
  • Goodman Group
  • GPT Group
  • Growthpoint Properties Australia
  • Hotel Property Investments
  • Industria REIT
  • Investa Office Fund
  • Mirvac Group
  • National Storage REIT
  • Propertylink Group
  • Rural Funds Group
  • Shopping Centres Australasia Property Group
  • Stockland
  • Sydney Airport
  • Transurban Group
  • Vicinity Centres

Companies trading ex-dividend next business day (ASX 300)

  • Graincorp Limited

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