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Saturday 20

October, 2018 1:48 PM



CommSec Daily Report Tuesday

CommSec Daily Report Tuesday

Heavy losses from mining and energy stocks are holding back the ASX 200 at lunch ahead of the RBA?s monthly decision on interest rates.

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05.06.2018 12:36 PM

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Heavy losses from mining and energy stocks are holding back the ASX 200 at lunch ahead of the RBA’s monthly decision on interest rates. The index is down by 0.3 per cent, wiping out around half Monday’s gains and comes despite firmer US equities overnight.

The ASX just before market close on Monday went down on reports its fire safety system was triggered accidently. Normal trade has resumed today.

Commodity prices lost ground in overnight trade. Oil slumped by 1.6 per cent partly on ongoing speculation additional oil supply could hit the market. A key meeting of major oil producing nations will be held on 22 June. Iron ore dropped by 1.3 per cent on surplus concerns. Plenty of supply in Australia and the possibility of less demand in China is a weight on the country’s biggest export.

Resource stocks aside, approximately 70-75 per cent of companies on the ASX 200 are losing ground. Property stocks, utilities and healthcare are among the worst. A comeback from the banks (which were down in early trade) has helped the index bounce off intraday lows.

Kogan.com (KGN) fell by 12 per cent on the open before entering a trading halt. This seemed to be on media speculation the online retailer’s two top executives are interested in selling up to $100m in the company’s shares.

Retail Food Group (RFG) is down 4.8 per cent after the owner of Gloria Jeans and Donut King cut profit expectations for the year. RFG expects underlying profit to slump by ~54 cent and is anticipating a statutory loss of $87.6m. This was blamed partly on the planned closure of as many as 200 Aussie stores, writedowns and difficult retail conditions.

Mortgage Choice (MOC) is slumping by 20 per cent on media reports franchisees are unhappy with its business model.

Ramsay Health (RHC) is down 3.3 per cent on a broker downgrade and price target cut.

Standouts are few and far between. A2 Milk (A2M) is up 5 per cent after fund manager Blackrock snapped up a 5 per cent stake in the infant formula group.

Software companies Wisetech (WTC) and Xero (XRO) are lifting by ~3.3 per cent while paintmaker Dulux (DLX) is up 2.9 per cent after receiving a broker upgrade.

1.6bn shares have changed hands so far today worth $1.8bn. 503 stocks are up, 528 are down and 385 are flat. 

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