The Bull

Monday 22

October, 201812:18 AM



CommSec Daily Report Monday

CommSec Daily Report Monday

Aussie shares have kicked off the week a little softer, with the ASX 200 index down 0.6 per cent at lunch following losses from the financials.

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01.10.2018 12:59 PM

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Aussie shares have kicked off the week a little softer, with the ASX 200 index down 0.6 per cent at lunch following losses from the financials. Volumes are light however with holidays across a number of states and territories today and week-long closures for the Shanghai Stock Exchange.

Shares fell by 1.8 per cent in September which made it the second worst month of 2018 while stocks went sideways over the September quarter.

Over the week, two updates on the state of manufacturing in China were worse than expected. This is a sign factories (both larger government controlled and smaller private firms) are being somewhat impacted by the US-China trade dispute. The US has recently applied tariffs on $250bn of Chinese imports with fears this could double in coming months.

The banks are a weight at lunch, slipping by as much as 1.5 per cent and reversing much of Friday’s gains.

Mining stocks are also easing despite a lift in commodity prices. Rio Tinto (RIO) is continuing to distance itself from some of its non-core assets overseas. The miner signed an agreement to sell its entire interest in the Grasberg mine in Indonesia for $3.5bn and also announced plans to invest $1.55bn in two joint venture iron ore projects.

Nufarm (NUF) is down 6 per cent and has come back online for the first time since Monday. NUF took most of last week to raise $238m from institutional investors as it deals with the impact on its business from the drought on the east coast. The dry weather has resulted in a 30-40 per cent drop in farmer crop production in parts of NSW and QLD and means less demand for its chemicals to protect crops.

Healthcare stocks – by far the worst performers last month – are today’s best. Aged care providers like Estia Health and Aveo were hit hard last month following news of a Royal
commission into the industry.

Energy stocks are a touch lower after surging in September thanks to oil prices hitting four-year highs ahead of US sanctions on Iran which kick off in November.

Most of the top tier/major updates on the Aussie economy are released at the start of a new month. Highlights this week will include the RBA Board decision on rates, an update on retail trade and figures on jobs growth in the US.

697m stocks have changed hands so far today worth $1.1bn. 423 stocks are up, 458 down and 365 are flat.

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