It has been a far more muted start to Tuesday’s trade compared to the day before. In the space of 24 hours, optimism over trade has faded after reports out of Beijing that China still sees the need for further negotiations before any deal can be signed. The ASX 200 did open lower and fell 21 points before recovering after the first hour of trade. At lunch, the benchmark index is rising 3.5 points to 6646.
Most sectors are improving as the session progresses. Healthcare, industrials and consumer staples are leading gains. Qantas (QAN) is a standout with a jump of 3.2 per cent, buy-now pay-later firm Afterpay Touch is lifting 2.5 per cent, briefly hitting fresh all-time highs. Telstra (TLS) is climbing 1.1 per cent as it holds its AGM today.
The resource sectors are the main constraint on the broader market with some heavy declines for base metal prices and crude oil. Iron ore also saw a fall of more than 1 per cent as investors digest trade developments. Heavyweight miners are leading losses. BHP Group (BHP) is down 1.7 per cent, Fortescue Metals (FMG) is 3.4 per cent weaker and Rio Tinto (RIO) is slightly better with a loss of 1.5 per cent. BHP, South32 (S32), Woodside (WPL) and Santos (STO) will all be providing quarterly updates later in the week.
Gold miners are also in retreat. Evolution Mining (EVN) is easing 1.5 per cent with the release of a quarterly production update. Production over 1Q20 (Sept Quarter) fell to just shy of 192,000 oz. from the June quarter. Costs were also higher in comparison with an All-in Sustaining Cost (AISC) of A$1,018/oz.
Media stocks are also underperforming. Southern Cross Media (SXL) is slumping 19 per cent on a trading update where earnings (EBITDA) guidance has been downgraded for FY20 to between $60 and $68 million, down 24 per cent on the year before. Nine Entertainment (NEC) is down 5.6 per cent. NEC is in the process of finalising its takeover of Macquarie Media (MRN) via its Fairfax subsidiary. Seven West (SWM) is falling by 3.2 per cent, SWM confirmed that it is in talks to sell its Pacific Magazines portfolio.
A fall in weekly consumer confidence had little impact on the AUD which is a touch weaker around 67.74 US cents. So far, 1.1b units have traded worth $1.6b with 462 stocks higher, 449 lower and 375 unchanged.
Published by CommSec