Local shares are off to a softer start to the new trading week. The ASX 200 has slipped 15 points or 0.23% to 6,635 towards lunch on Monday following a tepid lead-in from Wall Street. US markets edged lower on Friday’s session as traders booked profits with weekly gains of 2- 3% for major indices.
Losses are heaviest in the industrial and consumer facing sectors. Major supermarkets Coles Group (COL) is sliding 2.5% while Woolworths (WOW) is down 0.9%. The heavyweight financials and materials are also another drag. Westpac (WBC) is leading the losses for the major banks, trading 0.6% lower.
Communications are outperforming with Telstra (TLS) helping lift the sector with a 0.8% improvement. The tech sector is generally lower but Afterpay Touch (APT) is climbing 2.6%. Energy stocks continue to rise with the price of crude oil firming on continued supply concerns due to tensions between the US and Iran (Iran is a major producer of crude oil).
Metcash (MTS), which distributes products and goods to IGA Supermarkets, Cellarbrations and Mitre10 hardware, has declined 9% after releasing FY19 results. The wholesale distributor swung back into a profit for the year to $192.8 million. Despite the profit, earnings in its food division fell 3% with sales to IGA supermarkets declining. MTS announced a final dividend of $0.07/share.
Another steep decliner is Aveo Group (AOG), with a drop of 11% for the retirement home operator on a trading update. AOG remains adversely impacted by the softening housing market as prospective residents are holding on to existing properties and waiting to settle before moving into assisted living accommodation.
On the economic front, the RBA governor will be speaking with investors paying close attention to any clues for future rate cuts. The market is anticipating a rate cut as soon as the July meeting. The Aussie Dollar has continued to improve against the greenback and is now buying 69.5 US cents.
So far, 1.3b units have been traded worth $1.8b with 452 stocks higher, 610 lower and 413 unchanged.
Published by CommSec