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The Australian sharemarket has recovered from a slow start thanks to solid gains from energy and mining stocks, with the ASX 200 lifting by 8pts or 0.1 per cent to 6707 at lunch. Considering US stocks fell by as much as 0.7 per cent on Friday, continued geopolitical tensions and the best session in five weeks for the Australian market on Friday, a modest improvement is not a bad outcome. School holidays have also come to an end in all states and territories, which could boost volumes in coming weeks as the August profit reporting season approaches.

The price of oil rose on Friday on news Iran seized two British tankers in the Gulf. The US-Iran tensions continue in parallel. Oil Search (OSH) is up 2.1 per cent, Santos (STO) is up 1.2 per cent while Woodside (WPL) is up close to 0.9 per cent. WPL slumped by 6 per cent last week after delivering an underwhelming quarterly production result. Maintenance work at its Pluto LNG project in WA together with lower LNG prices weighed on its result.

Iron ore jumped by 2 per cent or $2.35 to US$121.85/t on ongoing supply concerns. The tightness in the iron ore markets could ease however as China’s iron ore port stockpiles jumped sharply last week. In the event of falling steel mill margins and a lift in supply, prices could fall away from five-year highs in coming months. Fortescue Metals (FMG) is up 1.8 per cent today, BHP is gaining 0.9 per cent and Rio Tinto (RIO) is up 0.5 per cent.

St Barbara Mines (SBM) has completed the acquisition of Atlantic Gold with investors in the Canadian based company approving its takeover. SBM believes the benefits of the purchase to include a long-life operation with an existing mine life of 12 years and substantial reserves; diversification of SBM’s production base and a platform for potential future growth in a low risk area.

Economy-wide spending stalled in June according to the CBA Business Sales Index. In trend terms, this marked the weakest monthly growth rate in over two years. Consumer caution and the onset of cold and wet weather appeared to discourage Aussies from venturing to the footy, cinema, theatre and music concerts. The RBA cut rates in June and July; the first back-to-back cuts in seven years. Current pricing for a rate cut by year’s end is 65 per cent.

A highlight this week will be the RBA Governor’s speech Thursday on inflation. FMG, BPT, ILU, EVN and OZL are set to post quarterly updates, June quarter US GDP will be out on Friday while American tech giants like Alphabet (Google’s parent company), Amazon and chipmaker AMD will post results.

1.3bn shares have changed hands so far today worth $1.9bn. 546 stocks are up, 450 down and 370 are flat.

Published by CommSec