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Local shares have been boosted by a strong showing from US sharemarkets overnight. US traders digested the release of US inflation data which came in higher than forecast in January, higher inflationary pressures have been one of the causes of the recent market volatility. However a slowdown in retail sales tempered views about the number of US interest rate hikes in 2018. The ASX 200 is around 0.95% higher at the time of writing, gaining 55 points, to be within touching distance of 5900 points.
Lifting the market higher most are the materials, financials and energy sectors although a majority of sectors are rising in early trade. Higher commodity prices are helping boost mining and energy stocks. Mining giant, BHP is influencing the market higher the most by gaining 3.2%, with Fortescue Metals (FMG) and Rio Tinto (RIO) also making gains of 4.5% and 2.5% respectively. All the major banks are lifting but Suncorp (SUN) is weaker by 2.9% after announcing a 9% fall in revenue over the first half of FY18 to $7.84 billion with Net Profit also weaker to $452 million. SUN also spent $65 million more than budgeted for natural hazards. The operator of the main market exchange, ASX Ltd (ASX) lifted half year profit and earnings by 5%, seeing its share price 3.5% higher.
Australia’s largest telco, Telstra (TLS) had already announced to market that it was expecting a write-down of $273 million earlier this month which negatively impacted its group earnings and net profit to the tune of 2.5% and 5.8% on the previous corresponding period. TLS did increase its mobile and fixed subscriber numbers and is on track for its FY18 guidance. TLS shares are 1.3% higher. It has been another busy day for the reporting season with the likes of Healthscope (HSO), Sonic Health (SHL), Origin Energy (ORG), Breville Group (BRG), Evolution Mining (EVN) and South32 (S32) all reporting earnings today.
In other company news, Oil Search (OSH) has completed its US$400 million acquisition in the Alaskan North Slope following US regulatory approval. OSH shares are 2.3% higher while CIMIC Group (CIM) is up 0.6% after its UGL business was awarded a $170 million contract to build and maintain the Tailem Bend Solar Farm in South Australia.
January jobs data has also been released this morning with 16,000 jobs added for the month, slightly higher than expected. The unemployment rate came in at 5.5% with a participation rate of 65.6%. The Aussie dollar eased slightly against the US from US79.3c to US79.c. So far, 1.4B units have traded worth $2.4B with 709 stocks higher, 312 lower and 318 unchanged.
Originally published by CommSec