The Australian market is off to a better start with the ASX 200 up 0.45 per cent at lunch thanks to gains across most sectors. This recoups just half Tuesday’s 0.92 per cent tumble, which was held back by China announcing retaliatory tariffs on the US.
U.S. stocks improved by 0.8 per cent last night, thanks partly to President Trump trying to reassure markets he will eventually strike a deal with China on trade. Trump was busy on Twitter last night (around 20 tweets from his personal account) saying that “when the time is right, we will make a deal” and also that it will happen faster than people think. There have been signs from both President Trump and President Xi that they intend to meet at next month’s G20 summit in Osaka, Japan which kicks off on June 28. While the trade tensions between both nations have intensified over the past week, the door remains open for a trade deal.
Energy stocks are up by around 1 per cent, thanks partly to a firmer oil price and tensions in the Middle East. Armed drones attacked a pumping station in Saudi Arabia, halting the kingdom’s main crosscountry pipeline temporarily. Saudi Arabia is one of the world’s biggest oil producers. Shares in Santos (STO), Woodside (WPL), Oil Search (OSH) and Origin (ORG) are higher.
The big banks are sluggish at lunch in what continues to be a difficult week for the sector. NAB, ANZ and Macquarie (MQG) are down an average of 5.7 per cent so far this week as all three traded ex-dividend on Monday and Tuesday. Westpac (WBC) will trade ex-dividend tomorrow for its 94c payment to eligible investors. This represents around 3.5 per cent of its share price, so it could be a weight on the local market Thursday.
Technology stocks are standing out, however fell heavily on Tuesday. The sector in the U.S. has been the most sensitive to trade tensions with China. Keep in mind that the S&P/ASX 200 Information Technology Index (a measure of tech stock performance in Australia) has surged by 28 per cent Year-to-Date and last recorded an annual decline in 2011.
Dulux (DLX) is treading water despite posting a 4.1 per cent fall in HY profit to $68.2m. The paint maker expects a better second half, has maintained its FY19 guidance, will pay a special dividend of 28c and is still subject to being bought by a Japanese company.
St Barbara Mines (SBM) has entered a trading halt as it aims to raise A$490m from investors to help pay for the acquisition of a Canadian gold miner.
The wage price index (the main measure of wages in Australia) rose by 0.5 per cent in the March quarter and 2.3 per cent on a year ago (consensus +0.6 per cent and +2.4 per cent). While this was a touch below consensus, wages growth is still 1 per cent ahead of inflation. Tomorrow’s monthly employment data will be watched closely by the RBA and economists alike.
1.1bn shares have changed hands so far today, worth $2.1bn. 571 stocks are up, 362 are down and 391 are flat.
Published by CommSec