The Big Four Banks Drive Australian Markets Higher

Marcus Jacob
26 Nov, 2015
New York City

Stock markets in Australia close in positive territory led by banks and healthcare stocks. Monash IVF Group forecasts 25% growth in profit. BHP denied toxicity allegations in Brazil.

[R]5:30 PM Sydney, Australia – Stock markets in Australia close in positive territory led by banks and healthcare stocks. Monash IVF Group forecasts 25% growth in profit. BHP denied toxicity allegations in Brazil.][/R]

The Australian stock market closed slightly higher as strong gains in finance and healthcare were negated by losses in mining, particularly BHP Billiton, which faced allegations of toxicity in Brazil.

The Autumn Statement of the UK chancellor George Osborne also had a negative impact on the market due to the unexpected announcement for legislature change that restricts the compensation rights of people injured in road accidents.

Shares of Slater and Gordon Limited, which has been expanding in the UK market through acquisitions, plunged 51.4% on the news, despite the claim of the company that the changes would not impact its 2016 performance.

The big four banks were the biggest gainers with Commonwealth Bank up 1.54%, Westpac jumping 1.23%, Australia and New Zealand Banking Group higher 0.44%, and National Australia Bank registering growth of 0.41%.

BHP Billiton denied the United Nations claims that the mud in the Brazil dam disaster is toxic. BHP stock declined 3.7% to $18.94.

The Australian dollar rose to 72.39 U.S. cents and in stock trading, turnover was flat at 764 million shares worth $4.6 billion.

At the close, the ASX 200 Index rose 17.0 or 0.3% to 5,210.70 and the broader All Ordinaries Index gained 14.50 to 5,259.70.

In commodities trading, gold fell US$5 to US$1,074 an ounce and Brent crude future for immediate month delivery slid 40 cents to US$45.77 a barrel.

IPO

IDP Education Limited surged 28.3% to $3.40 after the mortgage broker priced its stock at $2.65.

The stock opened at $3.25 and closed at $3.40.

Australian Stock Movers

Bank of Queensland Limited dropped 2.5% to $13.90 after CEO Jon Sutton cooled down the enthusiasm of analysts and said their recent upgrades might have been too optimistic.

While the recent rate hikes had supported the bank''s net interest margin, competitive pricing for new business and the low interest rate environment will limit the effect of the hikes, said Sutton.

Monash IVF Group Ltd soared 18.3% to $1.68 after the fertility treatment provider said it expects net profit growth of 25% for the first half of fiscal 2016.

James Thiedeman, CEO of the company, attributed the results to a strong rebound in patient treatments and associated revenues in the first quarter of fiscal 2016.

Ozforex Group Ltd slumped 2.2% to $3.47 after the foreign exchange services provider agreed to be acquired by Western Union for more than $840 million.

The company stated it was in the interest of its shareholders to engage with Western Union and is opening its books for an exclusive due diligence.

Slater & Gordon Limited tumbled 51.4% to 94 cents after the British government announced plans for legislature change that restricts the rights of people injured in road accidents to obtain compensation.

The law firm, which operates in the UK market as well, said it did not expect the changes to impact its 2016 performance but investors remain concerned about its expansion, leverage, and regulatory issues.

“The scale and diversity of the Slater Gordon Solutions business in the UK positions it well to deal with the potential impact of any future legislative change,” Slater & Gordon said.