Like yesterday, local shares started the session in a confident fashion. The ASX 200 started trade with a 5 point advance, before moving to a 36 point gain at the best levels of the morning. At lunch the index remained within sight of session highs, in contrast to Thursday’s session where the market was in retreat at the same time.
Sector performances saw Materials advance the most, while a recovery for bank names after yesterday’s weakness was the determining factor in the market moving ahead. By contrast Utilities and Property Trusts were the only two sectors in decline. Participation was below average up to lunch, with 2.2 billion shares traded up to lunch, worth $1.5 billion. 610 stocks were higher, 445 were weaker, while 395 were unchanged.
The confident tone locally reflected the continued positive momentum for US stocks overnight. Better than expected employment data in the form of a strong December ADP report (private payrolls) struck a positive note ahead of Friday’s December Non-Farm Payrolls release. The economic news helped the Dow Jones top 25,000 for the first time, while the S&P 500 and Nasdaq reached all-time highs.
Billabong (BBG) shares were at 3 cents firmer at 99 cents after the board short maker announced it had entered into an agreement with Boardriders, Inc. which will acquire all of the shares in BBG, other than those already owned by its related entities, at $1.00 per share in cash. Boardriders is controlled private equity firm Oaktree Capital Management, which already holds 19% of the shares in BBG in additionto being one of two senior lenders to the surf brand. The deal values BBG at $380 million, and Billabong Directors have recommended that Billabong shareholders vote in favour of the deal, in the absence of a superior proposal and subject to an independent expert concluding it is in the best interests of Billabong shareholders.
Shares in Lovisa Holdings (LOV) were 12% higher after the jewellery chain reported that first half sales rose 18.8% compared to the previous comparable period and up 7.4% on a comparable store basis. The group highlighted that the Christmas and Boxing Day sales periods performed ahead of expectations and that based on this performance, the company expects EBIT for the half year ended 31 December 2017 to be in the range of $34.5m to $35m, a lift on the prior year of between 22% and 24%. Lovisa cautioned that it has a disproportionate mix of EBIT weighted to the first half of the year, which had been enhanced by the strong performance of Christmas trade and Boxing Day sales.
Major currencies have seen mixed trade against the US dollar in European and US trade compared with the Asian session. The Aussie dollar rose from near US78.05 cents to around US78.65 cents and was at US78.60 cents in late US trade to be at US78.60 cents at lunchtime
Originally published by CommSec