Morning Bell 12 October

Sophia Mavridis
October 12, 2021

Rising bond yields and stagflation fears weighed down on the market yesterday and the ASX200 closed in the red.

In New York overnight, all three major indices closed lower, amid rising oil prices and economic worries.

Following US equities, the SPI futures are suggesting the ASX200 will fall 0.3% at the open this morning.

What to watch today:

  • In economic news, business confidence data for September will be released at 10:30am AEDT. The business confidence index rose to -5 in August from -7 in July. Forecasts expect the index to rise to -2 in September. Confidence has been improving in transport, finance, business and property, while remaining weak in construction, mining and retail.
  • Keep watch of petroleum company Ampol (ASX:ALD). The company will acquire all of Z Energy shares (ASX:ZEL) for NZ$3.78 cash per share. This is a $1.9 billion acquisition that looks to fast track a transition to electric vehicles. ZEL rose 5.9% yesterday, while ALD rose 2.9%.
  • One of the most traded stocks by Bell Direct clients yesterday was Star Entertainment (ASX:SGR). Its share price tumbled 22.9%, amid suspected money laundering, fraud and organised crime at its casinos. Bell Direct and advised clients were also trading BHP (ASX:BHP) and Fortescue Metals (ASX:FMG), after the iron ore price jumped as Chinese markets returned from national holidays. FMG, which is currently a Bell Potter BUY, has also just announced its plans to build a hydrogen-equipment factory in Gladstone in Central Queensland.
  • Reece (ASX:REH) is set to go ex-dividend today.
  • The oil price continues to trade higher, above US$80. Crude oil futures rose to a record high US$82.14 a barrel.
  • Spot gold is trading steady, while copper is higher. While the seaborne iron ore price has jumped more than 6%, trading at US$130.24 a tonne.

Trading ideas:

  • Bell Potter maintain their BUY rating on Imdex (ASX:IMD), after a positive first quarter trading update. They have increased their price target from $2.85 to $3.00, with a strong outlook for FY22 revenue growth and margin expansion.
  • Bullish charting signals have been identified in Firefinch (ASX:FFX), De Grey Mining (ASX:DEG) and KGL Resources (ASX:KGL), according to Trading Central.

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