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Local shares started the new trading week in a tentative manner before slowly building over the first hours of trade to be ahead by 10 points at the best level of the morning having started trade with a 4 point gain. Sector performances saw the Telecoms lead the gains over the morning, followed by solid gains for Materials and Energy names. Financials were the main weight on the index, whilst Healthcare and Property Trusts were also under pressure also. Participation was average with 2.3 billion transactions being measured by the ASX valued at $1.9 billion. At lunch 544 shares were higher, 551 were lower and 382 were unchanged.
Outcomes from the weekend were being weighed by investors. The two poles of the debate were on the one hand reports that ex-US national security adviser Michael Flynn had pleaded guilty to lying to the FBI. An ABC report indicated that Flynn was prepared to tell investigators that prior to taking office, Trump directed him to make contact with Russians. This was balanced by news that the US Senate had passed an amended version of the tax bill.
Bulk iron ore miners were supported by firmer iron ore prices, which have risen above US$70/t (CFR China) helped by higher steel prices, which has encouraged steel mills in China to boost output. Restocking demand has also prompted prices higher with reports of low iron ore inventories at some steel mills in the provinces of Shandong and Hebei. Energy names continued to be supported by better oil prices after OPEC and allied oil producers decided last week to extend production cuts for a further nine months until the end of 2018.
Shares in Metcash (MTS) rose sharply after reporting first half results. Group sales totalled $7.06 billion marking an increase of 7.6% on the prior corresponding, while group EBIT rose to $152 million, an increase of 18.7% from $128 million compared to the same time last year. Underlying profit after tax increased 19.6% to $99 million. MTS declared an interim dividend of 6 cents per share, fully franked. A short time ago Metcash shares were 9% or 26 cents higher at $3.01
Shares in Syrah Resources (SYR) rose 4% or 18 cents to $4.27 after announcing that it had signed a binding sales agreement with Zhanjiang Juxin New Energy Materials Co. The agreement is for 20,000 tonnes of natural graphite from the Balama operation in 2018, with the remaining terms of the agreement being confidential. Based in Guangdong Province, China, Zhanjiang Juxin specialises in the production of spherical graphite and anode material for lithium-ion batteries
Childcare services provider, G8 Education (GEM) plunged following a trading update in which the group lowered its forecast for full year underlying earnings to approximately $160 million Several factors influenced the downgrade including lower occupancy rates & regulatory changes. A short time ago GEM shares were at $3.48 for a loss of 93 cents or 21%.
Major currencies were mixed against the US dollar in European and US trade at the weekend. The Aussie dollar rose from US75.55 cents to almost US76.40 cents and was near US76.10 cents in late US trade; this morning the Aussie is US75.90 cents.
Originally published by CommSec
CommSec Daily Report Monday
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