Australian Market Wrap: Banks, telcos take ASX to 7-year high
- Market defies with 0.58% gain to close at 5811 - a new 7-year high
- Myer hits targeted long position with a 9.3% return
- AUDUSD shows strength and resilience trading above 0.7732
By Saxo Capital Markets (Australia)
Once again our markets defied the uncertain directions overnight to power higher by 33.66 points or 0.58% to close at 5811, reaching another 7-year high. The ASX/S&P 200 was taken higher by our banks and telcos and investors continued to pile up in our high yielding stocks. Telstra Corporation (our largest telco) lifted 7 cents or 1.06% to AUD6.67.
Three banks closed today at record highs. Commonwealth Bank of Australia once again reached all time highs, closing the day on whopping AUD2.48 gain or 2.73% to AUD93.27. ANZ Bank added 1.04% to settle at AUD34.98 - another record high for this bank. Westpac underperformed her peers, lifting 0.58% or 21 cents to close at AUD36.44 - another record high as well. National Australia Bank rallied 1.29% or 36.97 to close 10 cents shy of its 2013 high.
Today our second and last profit target was reached on Myer Holdings where we were able to unwind our entire long position at a 9.3% return. See here. For those who wish to hold onto their long positions, the next level to watch out for is AUD1.87.
Today's victor was Myer (MYR) which was propelled 5.62% to finish the day at AUD1.785. MYR’s rally today was slowed a little with weaker than expected December retail figures, but pushed on in the lead up to their interim report. If it does not cut its dividend MYR is target to pay a 5% interim dividend and are currently trading on a P/E of 10.5! With the RBA cutting the Australian cash rate and anticipation for another cut before July 1, MYR looks to have the tides turning in their favour.
Shares have recorded an 11th day of gains, as CBA extends its rally and Westpac and ANZ reach record highs, offset by losses in miners and energy stocks. The ASX/S&P200 is still trading within the uptrend channel after making a fresh intraday high 5,790. The current strong bullish momentum is expected to continue while pull back would be possible at around 5,800 level.
Australian Market Wrap is compiled by the Sydney trading desk at Saxo Capital Markets