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Tuesday 19

June, 2018 3:40 AM



CommSec Daily Report Thursday

CommSec Daily Report Thursday

Aussie shares are off to another better start following a big lift in US equities and surging oil prices.

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10.05.2018 12:42 PM

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Aussie shares are off to another better start following a big lift in US equities and surging oil prices. The ASX 200 index is up 0.3 per cent and is being supported by strong gains in energy and mining stocks like Woodside Petroleum (WPL), Oil Search (OSH) and BHP Billiton (BHP). With oil at 3.5 year highs however, airlines have been pushed lower.

The local market is now lifting for a ninth time in ten sessions, is at three-month highs and is on track to improve for six consecutive weeks. This follows a five-day winning streak for US stocks, and a 10 per cent lift in mining stocks in a little over a month thanks to strengthening commodity prices.

The price of oil surged by 3 per cent overnight to US$71.14/barrel, hitting three and a half year highs a day after President Trump pulled the US from the Iran nuclear accord together with an unexpected drop in US oil stockpiles.

Resource stocks aside, the banks are mixed at lunch. CBA has given back early gains and is now in negative territory following its third quarter earnings out yesterday. Most of the other major banks continue to lift however ahead of their dividend payments. Westpac (WBC), National Bank (NAB), ANZ and Macquarie (MQG) will all trade ex-dividend from next Monday to Thursday.

Boral (BLD) is up 2 per cent after agreeing to sell its US concrete business for US$127m. It expects to make US$45m in profit from the deal and plans to use those funds to pay down debt.

AMP Limited (AMP) is down 0.7 per cent and is facing two class actions on behalf of shareholders.

A profit warning for vet clinic operator, Greencross (GXL) yesterday is still doing some damage. GXL shares are down 2 per cent today and has received a number of broker downgrades after slumping by 22 per cent Wednesday.

Incitec Pivot (IPL) is down 2 per cent after disappointing with its half year results yesterday. Reece (REH) is easing by 1.3 per cent although the plumbing and bathroom products company surged by 14 per cent yesterday after raising some funds to help pay for a US acquisition.

So far there has been quite a muted market response to the Federal Budget. While the possibility of small tax cuts could boost household spending, retailers have been mostly under pressure in recent days. JB Hi-Fi (JBH) is down 0.4 per cent while Harvey Norman (HVN) is firmer today.

The $25bn in new infrastructure spending on roads, rail and public transport seemed to boost some construction and building products companies yesterday. On Thursday however, Transurban (TCL), Brickworks (BKW) and Adelaide Brighton (ABC) are all down.

1.5bn shares have changed hands today worth $2.7bn. 552 stocks are up, 471 down and 391 are unchanged.

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