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Local shares have defied a weak lead from Wall Street to start a new trading week with solid gains. After starting the session largely unchanged, compared to Friday’s close, the ASX 200 plotted a higher course over the morning to be up by 26pts or 0.4% at lunch. These gains were at odds with the latest news pulse around the US-China trade dispute and the losses on Wall Street at the weekend. US share markets closed lower after US President Trump said his team was “making a lot of progress” with Chinese trade talks, although “a partial deal” was not an option. Elsewhere, the market tone turned negative after a Chinese delegation cancelled planned visits to US farms, with the decision been seen as a proxy for relations between the two nations.

Early trade saw every ASX sector advance, with the exception of Information Technology. Gains were led by Energy names – over the course of last week Brent rose by 6.7% and Nymex rose by 5.9% , reflecting the attacks on Saudi Arabia’s oil infrastructure. Investors remain pre-occupied by Saudi’s ability to bring its damaged Abqaiq oil processing facility back to pre-attack levels of 4.9million barrels per day ( around 5% of global supply) by the end of September. Santos (STO) shares were lately at $7.84 for a gain of 5 cents or 0.6%.

Consumer Staples & Property Trusts were well supported , reflecting investor belief that the RBA will cut interest rates once again in October. Coles (COL) shares were at $14.94 for a gain of 16 cents or 1%. Goodman Group (GMG) shares were at $14.11, up 27 cents or 1.9%.

Gold stocks have been well supported over the morning; prices for the precious metal rose by more than US$15.00 an ounce or 1.0% last week reflecting the trajectory for interest rates globally and geopolitical factors. Middle East developments remain a watching brief for investors after Reuters reported: “A Saudi-led coalition on Friday launched a military operation north of Yemen’s port city of Hodeidah while the United States worked with Middle East and European nations to build a coalition to deter Iranian threats.” Northern Star Resources (NST) shares were 1.2% or 13 cents higher at $11.39 after announcing it has waived all conditions of its $242.6 million takeover offer for Echo Resources (EAR). NST is the largest shareholder in the West Australian goldminer with a 22% stake. In August NST offered 33 cents per share to acquire all EAR shares on issue.

Shares in travel agent Webjet were down 4% or 47 cents at $11.04 in response to news that one of Europe’s leading holiday companies, Thomas Cook, had filed for bankruptcy. In 2016 Webjet paid Thomas Cook £21 million to become a strategic partner of the British holiday company. Investors will be keenly awaiting an update form WEB to gauge the impact on earnings.

In currency trade , the Aussie dollar edged higher from the lows of the morning at 67.60 US cents, having fallen by more than a cent over the course of the last week. A speech by RBA governor tomorrow, titled “An economic update”, is being seen as important, following the August employment report that showed a slight lift in the unemployment rate and underemployment rate. As a result of the lift in the unemployment report, the markets are now pricing in an 80% chance that the RBA will cut interest rates in October.

Participation saw 1.3 billion shares were traded worth $1.9 billion. 636 stocks were higher at lunch, 409 fell and 330 were unchanged.

Published by  CommSec