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Saturday 22

September, 2018 7:39 AM



CommSec Daily Report Wednesday

CommSec Daily Report Wednesday

Local shares started the session with modest losses on Wednesday reflecting in part mixed fortunes for US and European markets overnight.

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04.07.2018 01:04 PM

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Local shares started the session with modest losses on Wednesday reflecting in part mixed fortunes for US and European markets overnight. US sharemarkets fell on Tuesday in a shortened session prior to the US July 4 holiday. The Dow Jones ended lower by 132 points or 0.5%. The S&P 500 index fell 0.5% and the Nasdaq was down 65 points or 0.9%. European share markets rose on easing political concerns after German Chancellor Angela Merkel reached deal with her Bavarian conservative coalition partners. The German Dax rose by 0.9% and the UK FTSE index rose 0.6%.

The ASX 200 opened the session with a 3 point gain before trading at a 32 point deficit at the low of the morning, as lunched loomed the index was lower by 33 points. Industrials led the sector declines, while Telecoms were the most improved group, followed by Utilities and Healthcare. Financials gave back some of yesterday’s gains, in turn weighing most on the Index. In the period to lunch, 1.4 billion shares were traded worth $1.8 billion. 445 stocks were higher, 579 traded lower and 352 were flat.

Noteworthy themes included an easing in Energy names, despite higher global oil prices. US crude oil rose above US$75 a barrel for the first time since November 2014. Santos (STO) was at $6.17 for a loss of 4 cents or 0.7%. Money managers were lower as a group in the face of concerns around the potential for weaker customer inflows in the near term. Shares in Platinum Asset Management (PTM) were at $5.37 for a loss of 49 cents or 8%. Retailers were lower, following a slightly better than expected reading for retail trade. Figures released by the ABS showed that retail sales rose by 0.4% in May from a month earlier. Forecasts centred on a 0.3% rise over the month. Harvey Norman (HVN) shares were recently at $3.38, down -2 cents or 0.6%.

Worley Parsons (WOR) announced that it expects to take an additional charge of approximately $20 million in relation to an income tax expense . The result brings the total charge for FY2018 to approximately $78.2 million, which will be excluded from the underlying earnings of the group. This charge reflects the impact on WOR’s US deferred tax assets of the reduction in the US corporate tax rate from 35% to 21%. Elsewhere, WOR announced it has been awarded new contracts, including a pre-FEED (front end engineering and design) contract by Borouge, a joint venture between Abu Dhabi National Oil Company (ADNOC) and Borealis AG. The project will include one of the world’s largest single train mixed feed steam crackers and associated petrochemical derivatives.

Sirtex Medical (SRX) was at $31.50 for a gain of 2 cents after receiving Australian Foreign Investment Review Board (FIRB) clearance to be acquired by CDH Investments and China Grand Pharmaceutical and Healthcare Holdings. Last month SRX agreed to be purchased by CDH and CGP for $33.60, pending among other matters approval from the FIRB. It comes after an earlier competing proposal from US group Varian Medical Systems for $28 a share was unsuccessful, resulting in a termination payment of $16 million being paid by SRX.

The Aussie dollar advanced even though the trade surplus in May was lower than expected. Commodity exports helped deliver a surplus of $827 million for the month, short of a $1.2 billion consensus forecast. Exports rose by 4% in May, while imports increased by 3%. The AUD/USD started Asian trade near 0.7385 US cents and was at 0.7410 a short time ago.

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