Markets up as Europe improves: market insights

The Australian market was up today after a strong lead from Wall St and European bourses overnight. Gold, financial, consumer discretionary, information technology, telecommunications sectors and energy sectors all rose today. The only sector in the red was utilities after the competition regulator, the ACCC, filed against three retail energy companies in the Federal court for breaking consumer laws.

The S&P/ASX200 was up 0.81% or 34.4 points to 4297.20.

The All Ordinaries Index was also up 0.75% or 32.6 points to 4387.80.

The day’s winners

PanAust (ASX:PNA) was up 6.33 % to $3.19 at 3.15pm. PanAust is a Brisbane-based copper and gold producer with operations in Southeast-Asia. The company has projects in Laos and Chile. It reported record production at the end of 2011 last month, and new gold production is due to start this month.

Boart Longyear (ASX: BLY) was trading up 5.85 % to $4.34 at 3.25pm. Based in Salt Lake City, Utah, but listed in Australia, 120-year old Boart Longyear is a leading provider of mineral exploration drilling services and drilling products in the world.

The day’s losers

Stockland (ASX: SGP) was down 4.00% to $3.015 at 3.00pm. The property developer today downgraded its full-year earnings guidance and said it was due to a deterioration in the residential property market.

Mirvac Group (ASX:MGR) was down 2.30% to $1.187 at 3.00pm today.

Property companies were affected by news from the Bank of Queensland that falling house prices in Queensland had contributed to the bank’s profit downgrade. In addition, Fitch Ratings released a report today saying there was an increase in mortgage late payments in the 30-to-59 day bracket, suggesting that borrowers are facing affordability problems. Arrears have increased in the (low-documentation) prime and non-conforming loan sectors.

“… declining house prices were the only key driver of mortgage performance to show a negative trend through Q411,” James Zanesi, a director in Fitch Rating’s Structured Finance said in a statement.

Sector movers

The strongest sector was the S&P/ASX 200 Information Technology (Sector) index which was up 1.81% or 9.7 points to 546.6 on the back of a higher world gold price over the weekend.

The biggest sector loser was the S&P/ASX 300 Utilities (Sector) which fell 0.48% or 23.2 points to 4814.60.

Currency

The Australian dollar was up today. One Australian dollar was buying

$US 1.0 514 at 3.30pm today.

Asian Markets

Japan – NIKKEI 225 was up a solid 1.56% or 156.18 points to 10174.40.

Hong Kong – Hang Seng was also up 1.37% or 282.36 points to 20951.20.

Asian equities were up to five-week highs today at 3.40pm AEST after the US Federal Reserve chairman’s comments overnight indicating he will maintain low US interest rates. Reports of stronger German business confidence filtered from Europe overnight buoying Asian exporters

The South Korean currency—the won– gained on reports of consumer confidence in that country.

“Worries about Europe’s debt crisis are being swept away,” said Tomomi Yamashita, a senior fund manager in Tokyo at Shinkin Asset Management, which oversees $US 6 billion told Bloomberg.

“The Fed’s stance of supporting the economic recovery through policy easing and adding liquidity to the market is helping to boost sentiment.”