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After four straight days of falls, the Aussie market is off to a cracking start Tuesday, with the ASX 200 up 1.2 per cent and approaching 6000pts. This was off the back of an equally impressive gain ~1.4 per cent for the Dow Jones last night. Updates on the strength of the US economy were encouraging while top Republican lawmakers urged President Trump to reconsider his position on tariffs.
President Trump last week announced plans to implement steel and aluminium tariffs on its import partners. While the President said he would formalise the tariff this week, detail was light and he has received plenty of opposition from his own party. It is possible details could change or the tariffs delayed. The main concern however has been on what happens next and future trade tensions/retaliatory measures. Despite last night’s gains, US shares slumped by 4.5 per cent in the prior four days.
All sectors of the sharemarket are higher at lunch with the strongest gains being enjoyed by the mining and energy sectors (up more than 2 per cent). Keep in mind resource stocks lead the market lower in recent days with iron ore prices (a major component of steel production) has fallen by 5.5 per cent over the past week.
BHP Billiton (BHP) – which has spoken out against the US tariffs – is up almost 3 per cent and is helping the mining index lift most.
News Corp (NWS) and Telstra (TLS) have both signed agreements to combine Foxtel and Fox Spots Australia. NWS will have a 65 per cent shareholding in the new group while TLS will hold a 35 per cent stake. The deal is expected to wrap up by June and comes two months after the ACCC gave its blessing for the deal to go ahead.
Telstra (TLS) said it would record a one-time $263m gain from the deal but has not changed its FY18 forecasts.
Retail trade rose by a much lower than expected 0.1 per cent in January (0.4 per cent consensus). Sales at department stores remained sluggish, slipping by 0.6 per cent over the month.
The Reserve Bank (RBA) will almost certainly leave rates on hold this afternoon. August 2016 was the last time the central bank moved interest rates.
1.9bn shares have changed hands so far worth $2.4bn. 643 stocks are up, 408 are down and 354 are flat.
Published by CommSec