Aussie shares are down by 0.85 per cent at lunch, making it the sixth fall in eight days as global trade tensions remain a weight on equities. The local market is in defensive mode with gold and property companies the only winners.
The Australian sharemarket rose by 1.1% in May; its fifth straight monthly improvement. The ASX 200 is up 13 per cent so far this calendar year. Over the month, telcos did best, surging by 7.3 per cent followed by miners and healthcare stocks. Consumer staples, technology and energy companies fell most. The best performing stock was Lynas Corp (LYC) which surged by 54 per cent last month. The possibility of China using its dominance in rare earth minerals to hurt the US has helped push LYC higher. LYC is one of the world’s largest rare earth producers outside China.
Nufarm (NUF) said ‘as a supplier of glyphosate based herbicides, it is exposed to risk of litigation brought against such suppliers’. NUF ‘is assessing and considering this risk very carefully.’ NUF shares are down 4 per cent at lunch.
New AMP Chief Financial Officer, John Patrick Moorhead is expected to commence as Group CFO on 1 October to ‘ensure an orderly transition and continuity of leadership.’
Most of the gold miners are lifting strongly at lunch, with Newcrest (NCM), Northern Star (NST), Regis (RRL), Evolution (EVN) and St Barbara Mines (SBM) adding around 6 pts to the ASX 200. Across the broader market however, more than 75 per cent of stocks are losing ground.
The price of oil fell by 5.5 per cent on Friday while iron ore slumped by close to 2 per cent to below US$100/t. This is pushing miners like Fortescue (FMG), Rio Tinto (RIO), BHP and Woodside (WPL) lower at lunch.
On the economic front this morning, national home prices fell by 0.4 per cent in May. While property prices remain under pressure, this marked the smallest monthly decline in a year and there have been signs of firming prices in Sydney over the past fortnight. Also note that future rate cuts, the Federal Election results and APRA recently announcing potential loosening of some lending rules could support prices.
1.5bn shares have changed hands so far on Monday worth $2.6bn. 389 stocks are up, 650 down and 371 are flat.
The start of a new season is always a busy time for markets. Economists are widely expecting a RBA rate cut on Tuesday (first in almost three years), data on retail trade, GDP and trade will be released this week while escalating US trade tensions will remain a risk. On Friday, a key monthly update on US jobs growth will be released and British PM Theresa May is set to step down.
Published by CommSec