\n\tBy Stephen Hogan, Senior Private Client Adviser, Equities\/Derivatives<\/p>\n
\tAustralian Market<\/strong><\/p>\n \tThe Australian market (ASX<\/span> 200) closed <\/span>down -28.9 points or -0.55% to 5180.1 <\/strong><\/span><\/span>today. The move lower appears to be lead by another basket of downgrades to mining services companies. We had a sharp move down in the morning going as low as 5160.6 before moving to a range slightly higher for the afternoon. Overnight the Dow Jones closed lower, falling -19.12 points or 0.12% with traders looking reluctant before the Federal Reserve Chairman Ben Bernanke speaks <\/span>on Wednesday<\/span><\/span>. While the majority of sectors finished mixed, the Gold sector rose 6.12% for the day.<\/span><\/p>\n \n\t <\/span><\/p>\n \n\tThe minutes of the RBA's<\/span> May board meeting are out, offering an explanation for the surprise rate cut: For some months the Board had considered that the inflation outlook provided scope to ease monetary policy further, should that be necessary to support demand. Members <\/span>recognized<\/span> that the effects of the earlier reductions in interest rates were still working through the economy.<\/span><\/span><\/p>\n \n\t <\/span><\/p>\n \n\tNonetheless, growth was expected to be somewhat below trend for a while, and the inflation outlook had, if anything, been revised down slightly. Members were conscious of the strengthening conditions in the housing market, but also noted that, thus far, credit growth had remained subdued.<\/span><\/p>\n \n\t <\/span><\/p>\n \n\tTaking all the factors into consideration, the Board decided that some of the scope to ease policy should be used at this meeting. It judged that a further reduction in the cash rate was appropriate to encourage sustainable growth in the economy, consistent with achieving the inflation target.<\/span><\/p>\n \n\t <\/span><\/p>\n \n\tTransfield<\/span> Services ((TSE<\/span>)) released a downgraded profit forecast<\/span> <\/span>to as low as $62 million financial year to end in June, substantially less than the $85-90 million figure flagged earlier. The company also announced it would shed 113 jobs.<\/span><\/p>\n \n\t <\/span><\/p>\n \n\tSeven West media ((SWM<\/span>)) has appointed Tim Worner<\/span> as chief executive, replacing Don Voelte<\/span> who held the role for just 12 months and will return to his boardroom as deputy chairman on <\/span>July 1<\/span><\/span>.<\/span><\/p>\n \n\t <\/span><\/p>\n \n\tDiscovery Metals ((DML<\/span>)) shares dropped about 20% today when the <\/span>Botswana-focused copper miner said it was seeking a buyer<\/span> and came out of a long trading suspension. Discovery said it had begun a formal process of seeking bids for the company and was talking to a number of interested parties, including spurned Chinese private equity suitor Cathay Financial Corp. Cathay Fortune has proposed a new indicative and conditional offer of 35-40c<\/span> per share and had started due diligence, but there was no guarantee it would make a bid, Discovery said. <\/span>Discovery had rejected a $1.70 per share bid<\/span> <\/span>from Cathay last year. Discovery shares, which had been suspended since <\/span>April 18<\/span><\/span>, fell as low as 21.5c.<\/span><\/p>\n \n\t <\/span><\/p>\n \n\tBoart<\/span> Longyear<\/span> ((BLY<\/span>)) stated that <\/span><\/span>the slowdown in the resources sector has led to a significant drop in demand for its business and forced it to <\/span>cut more than 1000 jobs worldwide<\/span> <\/span>since the start of the year. The utilisation<\/span> rates for its drilling rigs could fall as much as 20% compared to last year. CEO Richard O'Brien said at the AGM<\/span> "The downturn in capital and exploration spending in the mining sector globally has clearly reduced the demand for drilling services and products."<\/span><\/p>\n \n\t <\/span><\/p>\n \n\tAUD is currently trading at <\/span>$0.9829, up $0.0023 <\/strong><\/span><\/span>against the USD.<\/span><\/p>\n \n\t \tSt Barbara Limited ((SBM<\/span>)) up $0.06 or 9.52% to $0.69<\/span><\/p>\n \n\tPerseus<\/span> Mining Limited ((PRU<\/span>)) up $0.095 or 9.05% to $1.145<\/span><\/p>\n \n\tResolute Mining Limited ((RSG<\/span>)) up $0.055 or 7.80% to $0.76<\/span><\/p>\n \n\tBeadell<\/span> Resources Limited ((BDR<\/span>)) up $0.045 or 7.69% to $0.63<\/span><\/p>\n \n\tNewcrest<\/span> Mining Limited ((NCM<\/span>)) up $1.11 or 7.62% to $15.67<\/span><\/p>\n \n\t \tDiscovery Metals Limited ((DML<\/span>)) down -$0.135 or -39.71% to $0.205<\/span><\/p>\n \n\tFleetwood Corporation Limited ((FWD)) down -$1.85 or -24.50% to $5.70<\/span><\/p>\n \n\tTransfield<\/span> Services Limited ((TSE<\/span>)) down -$0.29 or -22.75% to $0.985<\/span><\/p>\n \n\tMaverick Drilling and Exploration Limited ((MAD)) down -$0.10 or -16.95% to $0.49<\/span><\/p>\n \n\tSundance Resources Limited ((SDL<\/span>)) down -$0.009 or -10.23% to $0.079<\/span><\/p>\n \n\tOur Comments<\/strong><\/p>\n \n\tNice to see the market bounce off its lows today and continue to be well supported. I think a major theme here will be to buy on any weakness. Interesting to note the financials were sold off pretty convincingly today whilst the materials finished slightly ahead. BHP<\/span> closed up 4c<\/span> after being down 28c<\/span> early. The market is slowly figuring it out here that the yield play is close to being over.<\/span><\/p>\n \n\t <\/span><\/p>\n \n\tWe currently are advocates of buying the following stocks with a long term view – STO<\/span>, CCL<\/span>, BHP<\/span>, WTF and ORG.<\/span> \n\t(For a more comprehensive summary of last night’s market action see FNArena’s<\/span><\/a> Overnight Report.) \n\tRe-published with permission. Views expressed are not by association FNArena's<\/span> (see our disclaimer).<\/em><\/p>\n
\n\tTop Performers<\/strong><\/p>\n
\n\tBottom Performers<\/strong><\/p>\n
\n\t <\/p>\n
\n\t <\/p>\n