Aussie shares are off to a softer start to the week, weighed by a weak return from Wall St, on a holiday shortened session, over the weekend. The ASX 200 is erasing some of its losses at the open but still easing 25 points or 0.44% to 5691 at midday.
The continued slump in commodity prices is dragging the local energy and material sectors lower. Both sectors are the main weight and the sharpest decliners on the broader market. Global oil prices fell between 6-8% as the oil market is estimated to be in surplus while US-China trade uncertainties are thought to be hampering global demand. Among the local producers, Woodside (WPL) is down 1.8% while Santos (STO) is sliding 3.5%. Lower oil prices can be a benefit for airlines fuel costs with Qantas (QAN) trading higher by 3.6%.
Iron ore dropped 4.4% on reports that Chinese steelmakers were offloading inventories. Prices are falling as declining steel margins dent expectations of Chinese steel production. Major miners BHP and Rio Tinto are falling 2.9% and 2.8% respectively. Fortescue is faring slightly better, lower by 1.4%.
The financials sector is now higher for a fifth straight session. Three of the big four banks are lifting with Westpac (WBC) the exception, easing 0.2%. British based bank CYBG (CYB) which operates under Clydesdale Bank in the UK is advancing 2.8%. Over the weekend, EU leaders approved the UK’s Brexit withdrawal agreement. The property sector is also improving so far on Monday. IT names are also climbing with Wisetech Global (WTC) up 3.3% and Afterpay Touch (APT) improving by 3% as the IT subindex records the largest percentage gain.
In company news, online retailer Kogan.com (KGN) has entered into a multi-year agreement with Citigroup to launch a Kogan Money Credit Card, expected to be available in 2019. Shares for the retailer are up 5%. Super Retail (SUL) is advancing 4% on a broker upgrade.
It is a quiet day on the economic front with the main release the September quarter business investment or capex release this Thursday. The Aussie dollar remains near 72.3 US cents.
So far, 0.8B units have been traded worth $1.6B with 364 stocks higher, 540 lower and 318 unchanged.
Published by James Tao, CommSec