Following a strong end to the week in the US on Friday, the Australian sharemarket has lifted for a fifth straight day, with the ASX 200 up by 47.8 pts or 0.69 per cent to 6993 – around session highs. This is the market’s longest winning streak since April. Eight sectors and 110 stocks finished higher, with Energy climbing most. This was in-part due to a strong rally in commodity prices, which also supported a 0.88 per cent lift in the Materials sector. Financials managed to claw back a 0.22 per cent loss and finish on a rather flat note. Despite rising by as much as 1.3 per cent in early trade, the Tech sector finished 0.4 per cent lower.
In economic news, the CoreLogic Home Value Index of national home prices fell by 1.3 per cent in July, the third straight monthly decline. Home prices fell in five of eight capital cities. The Melbourne Institute’s Australian Inflation gauge rose by 1.2 per cent in July – the biggest monthly rise in 20 years. The annual rate rose from 4.7 per cent to a 19-year high of 5.4 per cent. This comes ahead of the Reserve Bank of Australia’s (RBA) interest rate decision, which will be handed down tomorrow at 2:30pm AEST. The market expects the RBA to lift the official cash rate by 50 basis points or 0.5 per cent.
In company news, United Malt Group (UMG) released a trading update this morning, outlining a reduction in its EBITDA guidance by ~18.4 per cent. The company also mentioned that the margins of its North American operations were being weighed by increased production costs, ongoing supply chain disruptions and higher than expected energy costs. UMG shares finished 17.2 per cent lower and were the worst performers on the market today.
Infratil (IFT), a New Zealand (NZ)-based infrastructure investment company, along with the NZ Super Fund, has invested US$300 million to acquire a 12 per cent stake in Longroad Energy, a US renewable energy company. Both IFT and the NZ Super Fund will each invest a further US$100 million to retain a ~37 per cent stake. Shares of IFT finished 1.3 per cent higher today.
Aussie Broadband (ABB) shed 15.6 per cent. This comes despite ABB announcing its expectation of EBITDA being ‘at the top end’ of its guidance. Although the telecommunications company posted a 7 per cent quarterly increase in its total broadband services, its annual broadband services (excluding the contribution of an acquisition it made earlier this year) missed guidance.
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3.4bn shares were traded, worth $6.4bn. 699 stocks rose, 747 fell & 342 finished unchanged.
In the US, Purchasing Manufacturer’s Index (PMI) are released with construction spending.
Activision, Pinterest & World Wrestling Entertainment are set to post earnings results tonight.
Originally published by Divik Nigam – (Author), CommSec
