In an uneventful start to the session, local shares have been treading water in the early part of trade on Thursday. The ASX 200 index traded in a tight range in the morning but is trading at its best levels approaching lunch, up 10 points or 0.2% higher to 5854.
Improvements have been led by the energy sector despite crude prices sliding overnight as investors mull over USChina trade relations and global growth concerns. Santos (STO) has been the standout so far as the SA-based energy producer lifted its December quarterly sales revenue and production by 7% and 6% respectively. Santos shares are also among the best performers in the top 200 as it lifts 4%. Telco stocks are also advancing with Telstra (TLS) lifting 1.7% and Hutchison Aust. (HTA) up 4%.
The main underperformers have been among the materials sector and consumer staples. Losses among gold miners have been the main weight with stocks such as St Barbara (SBM), Northern Star (NST) and Regis Resources (RRL) all lower between 4.5% and 5.5%. All three miners released quarterly results yesterday and have today all received broker downgrades.
More miners are releasing quarterly production updates today. Notably, Galaxy Resources (GXY), which is declining 4.3% with the lithium miner reporting Q2 output of 33,780 tons or spodumene concentrate (source of lithium) and an average cash margin of US$288/ton for the same period. Evolution Mining (EVN) is easing 5% as the gold miner looks to be on track to reach its FY19 production target but with costs rising to the top end of its guidance range of $850-$900/oz.
Coles Group (COL) is down 2% after signing agreements to build two new distribution centres, one in QLD & NSW at a cost of $950 million over 6 years. COL will also take a 1H19 $146 million provision relating to lease exit costs & redundancies for current distribution centres
The Aussie dollar has firmed above 71.6 US cents against the greenback following better than expected December jobs data with 21,600 jobs added over the month and the unemployment rate falling to 5%. So far 0.7b units have traded worth $1.4b with 459 stocks higher, 398 weaker and 299 unchanged.
Published by James Tao, CommSec