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Saturday 17

November, 2018 1:16 AM



CommSec Daily Report Tuesday

CommSec Daily Report Tuesday

Local shares are a touch weaker towards lunch on Tuesday following a sharp sell-off on Wall Street overnight.

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30.10.2018 12:55 PM

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Local shares are a touch weaker towards lunch on Tuesday following a sharp sell-off on Wall Street overnight. The ASX 200 is slipping 10 points or 0.17% to 5718.4. US indices all closed weaker with the Dow Jones shedding ~1% after trading in a 900 point range. After a strong start, US indices swung into losses on reports that the US administration could look to impose further tariffs on Chinese imports.

Losses have been minimised with gains for three of the big four banks and the major supermarkets. Westpac (WBC) is leading gains for the big lenders as it climbs 0.6% while Commonwealth Bank (CBA) lifts 0.4%. Woolworths (WOW) is advancing 0.3% while Coles’ owner Wesfarmers (WES) is also higher.

Contributing most to the market losses are energy and healthcare names. The healthcare sector is weighed most by a 0.8% decline in biotech firm CSL Ltd (CSL) and 1% loss for ResMed (RMD). Lower commodity prices are generally weighing on energy producers with Oil Search (OSH) down 2.5%. Beach Energy (BPT) is bucking the trend as it jumps 8.6% on several broker upgrades following a positive quarterly update yesterday.

Caltex (CTX) is also off by 1.5% on an update at its investor day. The fuel retailer and supplier did announce it will look to increase its 2019 dividend payout ratio to 50- 70% but also provided some weaker guidance for the remainder of 2018. 3Q retail fuel volumes and margins were impacted by higher crude prices and a low AUD while an outage at a QLD refinery will see a negative impact to gas and diesel production, impacting EBIT by $15-20m.

Retailer Lovisa (LOV) is slumping 18.5% after providing a weaker trading update at its AGM. Comparable sales for FY19 are so far down 0.9% compared to its target range of 3-5% growth. Elsewhere, building materials firm, Boral Ltd (BLD) is down 4% on a weaker trading update for 1Q19.

Australia’s September building approvals were up 3.3% compared to estimates of 3% lift. Approvals are down 14.1% year on year. Weekly consumer confidence also lifted 2% to 114.6 points last week according to a weekly survey. The Aussie dollar buys 70.7 US cents.

So far, 1.6B units have traded worth $1.6B with 372 stocks higher 582 lower and 320 unchanged.

Published by James Tao, CommSec
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