Aussie shares are improving by close to 0.5 per cent at lunch, with the ASX 200 briefly lifting above 7000pts and advancing for a second day. The gains however, have effectively just recouped most of Monday’s 1.3 per cent slump (second worst performance of 2020).
Markets around the world are likely to remain volatile as the coronavirus continues its spread. This is expected to result in a sharp hit to the Chinese economy over the shortterm. While there is an expectation that markets should bounce back once the situation improves, equities remain directionless for the time being.
The Reserve Bank Governor is set to speak at the National Press Club in Sydney at 12:30pm AEDT, a day after the RBA kept rates on hold as expected. In the accompanying statement on Tuesday, the RBA seemed to downplay some of the risks to the economy, including the bushfires and the coronavirus. While CBA is pencilling in an April rate cut, the central bank seems in no hurry to cut interest rates.
Improvements are broad at lunch, with 10 of 12 sectors higher and 65 per cent of stocks gaining. The only losers are the defensive gold miners including Newcrest (NCM), Evolution (EVN), Northern Star (NST) and Regis (RRL). This highlights that investors are feeling more optimistic today.
BHP, Rio Tinto (RIO) and Fortescue (FMG) are being led higher by a 4.1 per cent lift in the iron ore price overnight. The price of the metal is still down by around 12 per cent in just four weeks.
The profit reporting season has slowly kicked off this week. CIMIC (CIM) is up 4 per cent after the construction group posted a $1bn loss for the past year after market close yesterday. Its bottom line was held back by costs associated with its decision to exit the Middle East. Not including those costs, CIM earnings rose by 3 per cent to $800m. The company also nominated a new CEO and flagged improved profits for FY20. CIM shares remain down 12 per cent Yearto-Date. Mortgage insurance company, Genworth (GMA) is down 4 per cent after disappointing investors with its FY19 results this morning.
1.1bn shares have changed hands so far worth $2.3bn. 664 stocks are up, 378 are down and 304 are unchanged.
Published by CommSec