The ASX 200 moved ahead confidently in opening trade on Friday, shrugging off losses seen on Wall Street overnight. US equities fell following weaker earnings and comments made by President Trump, who criticized the US Federal Reserve for raising interest-rates. The Dollar surrendered earlier gains and Treasury yields fell following the President’s remarks. The ASX 200 opened with an 8 point loss; the subsequent low was only a 9 point deficit – thereafter the index consolidated to vault back into positive territory trading 35 points higher at the best levels of the morning. Prices moderated into lunch with the index ahead by 12 points
At lunch Materials were the only sector to trade lower with a meaningful loss, with names in the sector weighed down by falling metals prices Information Technology and Energy were the leading improvers , with both sectors substantially outperforming their peers. In the period to lunch, 1.1 billion transactions were measured worth $1.9 billion dollars with 591 stocks higher, 421 lower and 372 unchanged.
Mining stocks were collectively lower after commodity prices fell overnight, reflecting a stronger US dollar and demand concerns driven by escalating US-China trade tensions. China accused US officials of “making false accusations” and refuted claims that Chinese President Xi Jinping was holding back trade talks. Copper prices fell -1.4%, breaching the US$6,000 a tonne level overnight for the first time in 12 months. South 32 (S32) shares were 3% or 11 cents lower at $3.54.
Shares in rare earth metals miner Lynas Corporation (LYC) were 2% or 4 cents lower at $2.09. The miner reported record rare earth oxide (REO) production of 4,804 tonnes, and record neodymium-praseodymium (NdPr) production of 1,447 tonnes; NdPr is used to create high-power magnets, while as an alloying agent it is combined with magnesium to create highstrength metals. Notably, water disruptions inhibited Lynas’ production in the month of May. LYC said it had made an early voluntary repayment of US$20 million to a loan facility, and as a result debt fell from US$185.2m at 31 March 2018 to US$165.2m at 30 June 2018. Looking ahead the miner continues to see strong demand particularly from Japanese customers.
Tabcorp (TAH) shares were 1 cent weaker at $4.65 after announcing yesterday evening that it has agreed to exit Sun Bets, the UK online wagering and gaming business it operates in partnership News UK. TAH will make a payment to News UK of approximately $71 million to exit the agreement, and consequently expects to record an after tax significant item of approximately $91 million in respect of the Sun Bets exit.
Sydney Airport (SYD) shares were 1.1% or 8 cents higher at $7.21 after reporting monthly traffic numbers. International traffic growth for June stood out, increasing by 5.0% compared to the prior corresponding period (pcp). Domestic traffic was flat in month, and as a result total traffic for the month rose by 1.8%. In year to date terms, domestic traffic is up 2.1%, International is 5.2% higher and total traffic has increased by +3.3%.
The Aussie dollar fell from highs near US74.11 cents overnight to lows near US73.22 cents on the risk off trade that saw traders favour the US dollar. A short time ago the local unit was at US73.30 cents in early Asian trade.
Published by CommSec