The Australian share market has risen for the eighth time in nine days. The S&P/ASX 200 index rose by 60 points or 0.8 per cent to 8½-month highs. The ASX 200 is up 5 per cent in January. In overseas markets on Friday, investors reacted positively to earnings results from major banks. The key US share indexes rose by between 0.3 per cent and 0.7 per cent.
In Australia on Monday there were gains in all 12 industry sectors with Information Technology up 1.8 per cent. But Materials rose just 0.2 per cent. Iron ore prices fell 2 per cent in Asia, on media reports that China will crack down on illegal attempts to drive the iron ore price higher. Shares in Fortescue Metals (FMG) fell 2.1 per cent. The Australian reports that Coles (COL) “will ‘drop and lock’ the price of more than 300 new items across supermarkets and online from this Wednesday until after the Easter Weekend on April 11.” Shares in COL rose by 0.7 per cent.
Super Retail Group (SUL) issued a trading update. The Chief Executive Officer said that the first half result was “outstanding”. SUL said “…normalised profit before tax (PBT) is expected to be between $212 million and $218 million.” Inventories at the end of December were $30 million lower than a year earlier. Shares in SUL rose by 7.7 per cent.
Tyro Payments (TYR) also issued a trading update. Transaction value is now estimated to be between $42.5-43.5 billion this financial year, up from the previously announced range of $40- 42bn. Shares in TYR rose by 6.9 per cent.
Shares in Baby Bunting (BBN) slid 11.6 per cent in response to a trading update. Total sales of $254.9 million for the half year to December 26 were below BBN expectations.
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On Monday, 3 billion shares were traded, worth $5.5 billion. Overall 800 stocks rose over the session, while 566 fell and 440 finished unchanged.
In terms of economic data, the Melbourne Institute reported that consumer prices rose by only 0.2 per cent in December, the smallest increase in four months.
US financial markets are closed on Monday for the Martin Luther King Jr holiday. On Tuesday in Australia are readings on consumer sentiment. Rio Tinto releases December quarter production figures on Tuesday. In China on Tuesday are economic growth figures and December activity data.
Originally published by Craig James – Chief Economist (Author), CommSec
