Aussie shares are off to a softer start, slipping by 0.2 per cent or 14pts to 6,463 pts at lunch. Keep in mind that the market surged eight times as much yesterday, gaining 1.74 per cent and hitting a fresh 11.5 year high in the process post-election.
The surprise Coalition victory has removed uncertainty around policy reform (including negative gearing, franking credits, Capital Gains Tax and caps on health insurance premium increases) proposed by the Labor party. This has been a reason private health insurers, banks, building product companies and some retailers surged on Monday.
The banks are continuing to make a difference, with the big four up an average 9-10 per cent in just two sessions. CBA is at a February 2018 high while Westpac (WBC), National Bank (NAB) and ANZ are near eight-month highs.
APRA this morning said it is consulting with the banks for the next month to potentially remove a serviceability buffer introduced four and a half years ago to help control the property market.
The market is being held back most at lunch by technology stocks, miners and supermarket chain Woolworths (WOW). This is despite the iron ore price remaining above US$100/t; a five-year high due mainly to concerns of lower global supply.
James Hardie (JHX) is up 2.8 per cent after posting a 57 per cent lift in annual profit to US$228.8m. While an acquisition in Europe and higher sales in North America helped boost revenue, the building products maker has decided to pay out a smaller US$0.26/share dividend (US$0.30/s last year).
The Reserve Bank is in focus today due to the release of the RBA’s May 7 meeting minutes and a speech by the bank’s governor Philip Lowe at 1.10pm AEST. The governor’s comments will be closely watched and scrutinised as it is Dr Lowe’s first speech in a couple of months and provides a platform to comment on last week’s lift in unemployment.
The CBA Business Sales Index – a measure of economy-wide spending – rose by 0.5 per cent in April which is above the longterm monthly growth pace. Warm weather constrained spending on clothing.
1bn shares have changed hands so far on Tuesday worth an above average $2.7bn. 397 stocks are up, 498 are down and 378 are unchanged.
Published by CommSec