The Australian market had its worst performance in more than two months on Tuesday and is down slightly at lunch today. The ASX 200 is down by 0.16 per cent and continues to flirt with 6000pts, although softer than expected inflation has helped limit the losses. Markets have come under some pressure in recent days partly on rising US bond yields which have been lifting at a faster than expected pace.
The headline Consumer Price Index (CPI) rose by a smaller than expected 0.6 per cent over the December quarter and 1.9 per cent over the year. Together with a lack of wages growth the Reserve Bank will be in no hurry to lift the cash rate. The Australian dollar fell back slightly following the data.
Almost all sectors are lower at lunch, with energy stocks struggling most. Mining companies are also under pressure after widespread losses in commodity prices.
Healthcare companies are standing out thanks to takeover activity in the sector. Sirtex Medical (SRX) is up 45 per cent after receiving and backing a $1.58bn ($28/share) takeover offer from a US based cancer treatment company called Varian Medical. The deal is expected to complete around May. Its shares are surging as the offer is a 49 per cent premium to SRX’s share price on Monday.
Treasury Wine Estates (TWE) is up 0.8 per cent after lifting its 1H18 profit by 37 per cent to $187.2m thanks to its operations in Asia, Europe and ANZ outperforming its expectations. The owner of Penfolds is taking steps to transform its US business by making changes to its US route-to-market which it hopes will help drive growth. This includes new distributor partnerships.
Origin Energy (ORG) has lifted its 2Q sales and revenue thanks to rising LNG production. ORG is down 1.6 per cent.
Beach Petroleum (BPT) has revised guidance and now expects to produce between 25.5 – 27.6 MMboe (from 24.9 – 27.2) and has cut its capital expenditure expectations to $405 – $455m (from $425 – $535m). Mining group, Independence (IGO) has lifted its quarterly gold, copper and cobalt production.
GUD Holdings (GUD) has posted a 16 per cent lift in profit from continuing operations to $25.8m in the first half and was led by double digit growth in its Automotive business.
1.9bn shares have changed hands, worth $2bn. 396 stocks are up, 711 are down and 360 are flat.
Tonight Boeing, Microsoft, Facebook and AT&T are all set to post their quarterly earnings. The Federal Reserve wraps up its two-day meeting on interest rates while data on private sector jobs growth in the US will also be released.
Originally published by CommSec