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Aussie shares have bounced back strongly from a slow start, with the ASX 200 index up 0.76 per cent at lunch to 5,799.3. On the open, the local market was down by as much as 0.87 per cent following a choppy end to the week in the US, futures pointing to a softer start to trade in the US tonight, civil unrest in Minneapolis and US-China tensions. Data on China’s manufacturing sector in May beat market expectations and highlights a slight expansion in activity over the month.

Not a bad way to kick off the new week, month and season considering the strength experienced by markets in recent weeks. Local shares have just enjoyed their fifth straight week of gains and have improved for two straight months. The ASX 200 index rose by 4.7 per cent last week and is now 31 per cent off the lows hit on March 23, at the peak of COVID-19 worries.

While the banks weighed on the local market early, all majors have now turned positive which goes a long way in keeping the ASX 200 positive. The biggest contributor to the gains however, is CSL Limited (CSL) which is up 3.6 per cent. The country’s largest company has fallen by ~10 per cent over the past fortnight. Gains from resource stocks and consumer discretionaries are driving the market higher.

Shares in The Star (SGR) are improving by 6.4 per cent. The casino operator plans to re-open its private gaming rooms, its hotel, retailing and dining venues today as restrictions ease. Due to a lift in expenses, SGR expects operating costs to rise to $20m in June. Shares in Freedom Foods (FNP) are down 5 per cent after four brokers reduced their share price expectations for the company over the next 12 months. Shares in the food group are down 30 per cent Year-to-Date.

On the data front, national home prices fell 0.4 per cent in May; the biggest fall in 12 months. Property prices are still up 8.3 per cent from a year ago. Prices fell most in Melbourne, Darwin, Sydney and Perth.

The start of a new season is always a very busy time for economists, and this week will be no different. The latest data on GDP, US jobs, manufacturing, retail spending and an RBA Board meeting will all be in focus. The RBA is set to keep interest rates steady at 0.25 per cent tomorrow afternoon. This follows two interest rate cuts by Australia’s central bank in March. On Friday, all eyes will be on the US non-farm payrolls which is the most closely watched employment data in the US. The market is expecting that around eight million jobs were lost in May, which could take the unemployment rate to almost 20 per cent. Worries about US-China relations will also be key following Hong Kong’s security law which was imposed by China late last week.

2.2bn shares have changed hands so far today, worth $3.3bn. 711 stocks are up, 458 down and 301 are unchanged.

Published by CommSec