Article / 05 February 2015 at 6:38 GMT

Australian Market Wrap: Banks, telcos take ASX to 7-year high

Trading Desk / Saxo Capital Markets
  • 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.

In other financials, Macquarie Bank (our domestic investment bank) broke out of its resistance level of AUD62.49 closing the day 68 cents higher or 1.05% to AUD65.43 which is a 7-year high. AMP Limited also settled 1.85% higher to AUD6.05 which was its 5-year high. Look out for a trade recommendation on this stock tomorrow. Capping gains for our markets were our energy stocks and materials: the energy index sank 1.97% as the price of oil snapped its rally and the materials sector lost 0.82%.

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.

 Talking the walk: Telstra is moving up in line with market momentum. Photo: iStock

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.

Echo Entertainment (EGP), which initially fell 2.3% on the day of its interim announcement, has today rallied 5.07% now doubt now that investors have time to properly digest its information in full. Our Energy sector today continues to remain at the mercy of the price of oil, down 1.97% in the six hours of trade. All our big players were caught up in the fall with Santos (STO), Worley Parson (WPL), Beach Petroleum (BPT) and Oil Search (OSH) down 3.23%, 3.07%, 2.98% and 2.83% to AUD8.09, AUD10.10, AUD1.14 and AUD8.23 respectively. As it stands, The US now has a new record level of inventory with 413m barrels in surplus.

Despite the Australian retail sales figure was disappointing, AUDUSD showed a lot of strength and resilience trading above 0.7732 but at the same time, the resistance level was held at 0.7800. We expect AUD to trade in the ranges of between 0.7851 and 0.7720, although the medium term outlook still remains bearish as AUDUSD is forming a temporary downtrend channel.

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.

-- Edited by Adam Courtenay

Australian Market Wrap is compiled by the Sydney trading desk at Saxo Capital Markets


The Saxo Bank Group entities each provide execution-only service and access to permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on or as a result of the use of the Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. When trading through your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of ourtrading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws. Please read our disclaimers:
- Notification on Non-Independent Invetment Research
- Full disclaimer

Check your inbox for a mail from us to fully activate your profile. No mail? Have us re-send your verification mail