Aussie shares are being boosted by the optimistic tone to come out of trade talks between US-China at the G20 summit. The two countries have agreed to halt additional tariffs for 90 days while negotiations are ongoing. According to the White House, if an agreement is not reached at the end of the 90 days, tariffs on $200 billion of Chinese imports into the US will have tariffs raised from 10% to 25%.
The ASX 200 is improving by 1.6% or 90 points to 5757 heading towards lunch. While all sectors are improving, healthcare, energy and materials are contributing most to broader gains. Growth stocks are also improving with tech stocks making advances. Wisetech Global (WTC) leading gains in the sector, up 5.2%.
The risk on mood has led more defensive stocks to decline. Gold miners, in particular, are weaker. Newcrest Mining (NCM) is down 1% while St Barbara (SBM) is 5.4% weaker
Consumer staples are slightly underperforming the broader gains despite Graincorp (GNC) being the biggest individual improver on the top 200 index. The agribusiness is surging 27% after receiving a takeover off for $10.42/share and valuing the business around $3.3 billion.
Supermarket chain, Coles Group (COL) is weaker for a fifth straight session, down 2.1% while Metcash (MTS) is declining 6.7% after releasing a mixed half yearly earnings result for FY19. Profit for the half lifted but MTS has flagged a tough outlook ahead.
Bluescope Steel (BSL) is another significant advancer with the steelmaker announcing a fresh $250 million on-market buy-back offer as part of its FY19 capital management program. BSL shares are rising 9%.
The Aussie dollar firmed against a weaker greenback following trade optimism, hitting a high of 73.8 US cents but since slipped back to 73.6 US cents. It is a big week of local economic releases with tomorrow’s RBA rate meeting and Thursday’s trade balance data.
So far, 1.2B units have traded worth $2.2B with 687 stocks higher, 330 lower and 289 unchanged.
Published by James Tao, CommSec