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Monday 17

December, 2018 7:57 AM



CommSec Daily Report Wednesday

CommSec Daily Report Wednesday

The continued sell off on Wall Street has led to a softer start for the local market.

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21.11.2018 12:49 PM

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The continued sell off on Wall Street has led to a softer start for the local market. Two of the major US indices have now erased their 2018 gains as concerns over global growth and trade tensions remain. The ASX 200 is lower by 56 points or 1% to 5615 towards lunch, falling to a 21 month low in the process.

Oil prices slumped nearly 7% overnight and fell to thei lowest level in over a year as oversupply fears remain. Oil prices have now fallen over ~25% since peaking in October. Local energy names are under pump early on Wednesday, Woodside (WPL) is down 3%, Santos (STO) is 3.75% weaker while Beach Energy (BPT) is falling 9.4%. Materials are also suffering some heavy losses with metals prices mostly lower in overnight trade. Miners BHP and Rio Tinto (RIO) are both 2.8% weaker.

The biggest mover on the market is Wesfarmers (WES) which is sliding 29% on the demerger of Coles. Coles Group (COL) is now trading separately and listed at $12.49. COL shares are up 4% after officially starting trade at 11am AEDT.

The healthcare sector is outperforming the broader market to be the only sector improving as it lifts on the back of the performances of CSL Ltd (CSL) and Sonic Healthcare (SHL). CSL is climbing 1.8% while SHL is up 2.1% as it reaffirm FY19 guidance at its AGM today. EBITDA growth of 3-5% is expected on FY18 underlying EBITDA of $962M (constant currency).

Gas pipeline operator, APA Group (APA) has had its proposed takeover bid by CKI Consortium terminated after the federal treasurer, Josh Frydenberg, officially blocked the move as being “contrary to the national interest". APA did re-confirm its FY19 EBITDA to be in the range of $1.55- $1.58 billion. APA shares are declining 1.3%.

Online classified marketplace, Trade Me Group (TME) has jumped 17% after receiving an indicative takeover proposal by Apax Partners for NZ$6.40/share. Meanwhile, The Reject Shop (TRS) is 15% higher after receiving a $2.70/share takeover offer.

The AUD fell sharply against USD gains, buying 72.15 US cents. So far, 1.1B units have traded worth $2.1B with 222 stocks higher, 776 lower and 343 unchanged.

By James Tao (Author). CommSec
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