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Australian shares are losing ground for a third day, with the ASX 200 index down by 0.4 per cent and is approaching 5900pts. Developments in the US seem to be influencing Australian shares most at the moment and follows a meaningful pullback for US shares overnight.
A slide in Boeing’s share price accounted for around a third of the Dow Jones’ falls overnight, while sluggish economic data, a lack of stability in the White House and rising fears of a trade war weighed on sentiment.
CNBC commentator Larry Kudlow has been named as the top economic advisor to President Trump. Yesterday President Trump fired his Secretary of State, Rex Tillerson only to replace him with current head of the CIA, Mike Pompeo. Mr Pompeo is known to be ultra-conservative and tends to not shy away from conflict. This comes a week after tariffs on steel and aluminium and President Trump’s top economic advisor resigned.
Losses from the banks, telcos and energy companies are weighing on the local market. Day three of the Royal Commission public hearings are underway and are relating to mortgage broker misconduct today.
Oil prices rose by 0.4 per cent overnight despite OPEC admitting that oil supply is likely to outpace demand this year. The US is expected to lift production by more than 10 per cent this year and will account for almost 90 per cent of non-OPEC supply growth. This undermines OPEC’s plans to reduce oil inventories to push oil prices higher.
While mining stocks are performing strongly Thursday, the sector has underperformed this week. Consumer discretionary stocks including Crown Resorts (CWN) and Aristocrat Leisure (ALL) are up while Wesfarmers (WES) is improving after receiving broker upgrades.
Newcrest Mining (NCM) is having a quieter day but is down by ~8 per cent this week. NCM confirmed it will not be meeting its production goals in 2018. This is due to issues with its biggest gold and copper mine which has had cracks form in its tailings dam (which collects mining by-products).
Although the market remains vulnerable to news in the US in coming months, ~$23bn in dividends will be paid to investors in March and April. $15bn in dividends is set to be distributed in March alone. Today, $600m will be paid from ResMed (RMD), Navitas (NVT), Spark (SKI) and Alumina (AWC). This generally results in funds making their way back into equity markets.
1.9bn shares have changed hands so far today worth $3.6bn. 481 stocks are up, 571 down and 340 are flat. Published by CommSec