Australian shares have shaken off a softer start, with the ASX 200 lifting by 0.5 per cent at lunch following an encouraging speech by China’s President Xi Jinping just before lunch. Healthcare stocks are down, while all other sectors are improving. Mining stocks are helping lift the market most while banks have also turned positive.
The Chinese president made no threats against the US or any other country relating to tariffs in a keynote address. He said China will enter a new phase in opening its economy, will significantly lower import tariffs for cars and on many other products. While detail was light, President Xi Jinping emphasised his desire for ‘win win’ outcomes which settled nerves. The market will now await President Trump’s reaction however for now Dow Futures have shot up.
There is no shortage of concerns for markets however, including the US/China trade tensions, the FBI raiding the office of President Trump’s lawyer Michael Cohen, US sanctions on Russia and worries of potential military conflict in Syria.
Aluminium miners like Alumina (AWC) and South32 (S32) are surging following a 7 per cent surge in the price of the metal overnight which was triggered by US sanctions on Russia. These were intended to punish the nation over its alleged involvement with Syria, Crimea and Ukraine. The world’s second largest aluminium miner Rusal slumped while aluminium surged on concerns production could be sidelined post sanctions which would hurt supply.
Around $2.5bn in dividends will be paid to investors this week, with Coca-Cola Amatil (CCL) and Sonic Health (SHL) paying today. Rio Tinto (RIO) and CSL – the two biggest dividend payers this week – will distribute their payments on Wednesday and Thursday.
Godfrey’s (GFY) is up 42 per cent after co-founder John Johnston launched a ~$13m takeover bid offering 32c/share to take the vacuum cleaner retailer private. This is a premium of ~52 per cent or ~$4.5m above its market value on Monday. Mr Johnston is 99 years old and co-founded the company in the 1930s. GFY shares are still down 20 per cent in 2018.
Wattle Health (WHA) has entered a joint venture with Organic Dairy Farmers of Australia and Niche Dairy. It plans to design, construct and operate a dedicated organic spray drying facility in Australia.
Billabong (BBG) no longer is trading on the Australian sharemarket after the Federal Court cleared the way for its purchase by a US group. It was suspended from official quotation yesterday.
2bn shares have changed hands so far today worth $1.9bn. 557 stocks are up, 423 down and 412 are flat.
Published by CommSec