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Local shares continued to advance in early trade on Tuesday. This, after northern hemisphere stock indices rose overnight, as participants took heart from the G20 developments at the weekend in relation to the trade dispute between the US and China. US equities posted solid gains with the S&P500 index reaching a record-high of 2,997.86 points during the session. At the close of trade, the Dow Jones rose by 117 points or 0.4%. The S&P500 lifted by 0.8% and the Nasdaq was up almost 85 points or 1.1%.

In opening trade the ASX 200 was ahead by 27 points at the best levels of the session, before consolidating into the lunchtime period. In sector terms the Materials sector led the gains, helped by advances in the bulk iron ore miners. Technology names were the next most improved helped by a recovery for names which had been marked down in recent days. Declines were led by Telecoms and Financials. Participation in the early part of the session was average, with 970 million transactions measured, valued at $2.01 billion. At lunchtime 575 shares were higher, 367 were lower and 351 were unchanged.

Iron ore miners lifted the Materials sector after iron ore rose by US$3.25 or 2.8% to US$121.20 a tonne in the last day, on concerns over tight supply. Prices have risen above the US$120/t level on supply concerns, with participants in China highlighting a scarcity of Australian cargoes. Higher steel prices are also creating greater iron ore demand.

Shares in the big four banks were under pressure as investors anticipated an interest rate decision from the RBA at 14:30 AEST. The central bank is widely expected to cut interest rates after a recent speech by Governor Phillip Lowe, hinted that further rate cuts were likely. The prospect of bank lending margins coming under further pressure from lower interest rates weighed on prices with Westpac (WBC) leading the declines with a fall of 0.9% at lunchtime.

Digital payment provider, Afterpay Touch (APT) recovered from the weakness of recent days. The selling for APT and its peers, including Zip Money (Z1P) & Splitit (SPT), was prompted by media reports that credit card giant Visa, is preparing to enter the market with a comparable product . Elsewhere, APT announced numerous organisational changes with co-founder Anthony Eisen stepping into the role of CEO, and Managing Director Nick Molnar taking on the position of Global Chief Revenue Officer. At the same time APT is also searching for an independent chairperson. At lunch APT shares were 6% higher, having fallen more than 12% in the previous 2 days.

Speedcast International (SDA) slumped 37% after downgrading underlying EBITDA expectations. The group provides remote communications and IT services to a range of sectors including Maritime, Energy, Mining and Media, in addition to NGO’s and Government customers. SDA cited broad influences such evolving market conditions and recent commercial developments as factors resulting in lowered earnings guidance. FY19 Underlying EBITDA guidance is now seen being between US$140 and $150M, compared to a previous estimated of between US$160M to $171M.

The Aussie dollar has retreated in the last day trading as lows as 0.6960. Selling pressure has been driven by weaker global manufacturing results and the majority of Australian economists expecting the RBA to cut the cash rate today.

Published by CommSec