Erasing yesterday’s gains on iron price falls: Aus shares close 0.4% lower

Market Reports

by Jessica Amir

The Australian share market finished lower on Tuesday, wiping out yesterday’s gains. From the outset, we had negative leads to follow as Wall Street closed lower when Facebook lost 6.8 per cent, after it was revealed that the tech giant could collect data on 50 million people's profiles without their consent.

As for our sectors, over half closed in the red with miners copping the most heat after the iron ore price fell. Mining giants, BHP (ASX:BHP) and RIO (ASX:RIO) lost almost 2 per cent.

Telcos, staples and financials closed in the black though. The likes of Graincorp (ASX:GNC) gained over 2 per cent. CBA (ASX:CBA), Westpac (ASX:WBC) and ANZ (ASX:ANZ) closed in positive territory, while NAB (ASX:NAB) closed below the line on the sixth day of the banking royal commission.

The S&P/ASX 200 index closed 23 points lower, or 0.4 per cent lower to finish at 5,936. 

Futures

The Dow futures a 1 point higher, and the ASX200 futures are eyeing a fall of 33 points.

Value of trades

$4.7 billion on volume of 648 million shares at the close of trade. The top three stocks by value were Westpac Banking Corp (ASX:WBC), Commonwealth Bank of Australia (ASX:CBA) and BHP Billiton Limited (ASX:BHP).

Economic news

The RBA advised that financial markets are continuing to price in that interest rates will remained unchanged in 2018, but markets are expecting a 25 basis point rise in the first half of 2019. That’s according to its Monetary Policy Meeting minutes.

Property price growth slowed in the December quarter according to the ABS. House prices rose 5 per cent, down from the September quarter growth of 8.3 per cent. Sydney prices also slowed significantly. 

Company news

Downer EDI (ASX:DOW) lost a legal claim against engineering contracting company, John Holland, on whether the drainage system provided by the contractors at a train maintenance centre would last its designed life. As a result of the court matter, Downer has been hit with $25 million in legal and other costs, which will be expenses as a write-down (significant item) this financial year. Downer EDI (ASX:DOW) closed 0.3 per cent lower at $6.59.

Retail company Kathmandu (ASX:KMD) announced its net profit after tax and earnings and sales lifted in the first half of 2018 year ending 31 January 2018. Its NPAT rose 23 per cent and it also declared an interim dividend of NZ 4 cents per share. It also announced the acquisition of hiking and general outdoor footwear company, Oboz Footwear for $60 million. Kathmandu (ASX:KMD) shares last traded at $2.30.

Freedom Foods (ASX:FNP) has announced it raised about $182 million for the expansion of its programs, as well as for ‘balance sheet flexibility’.

Travel company Helloworld Travel (ASX:HLO) announced the purchase of Flight Systems, a provider of web-based flight booking technologies. The business is expected to generate a total transaction value of over $80 million in the 2018 financial year.

QBE Insurance (ASX:QBE) is offering note holders the opportunity to tender their notes to be bought by QBE for in exchange for cash.

New Energy Solar (ASX:NEW) has completed the purchase and financing of a 200 megawatt solar project in Southern California worth US$290 million. Operational by late 2019, the company will sell power and renewable energy credits generated to a electricity provider, for 20 years.

Resource and energy company, WorleyParsons (ASX:WOR) has been awarded the project management consultancy contract by the largest oil refinery in the UAE, the Ruwais Refinery, which is owned by ADNOC.

Best and worst performers of the day

The best performing sector was telcos adding 0.4 per cent to close at 1,219. The worst performing sector was materials, shedding 1.4 per cent to close at 11,249. points.

The best performing stock in the S&P/ASX 200 was Retail Food Group Limited (ASX:RFG), rising 6.7 per cent to close at $1.12. Shares in Fairfax Media Limited (ASX:FXJ) and IPH (ASX:IPH) followed higher.

The worst performing stock in the S&P/ASX 200 was TPG Telecom Limited (ASX:TPM), dropping 4.6 per cent to close at $5.76. Shares in Seven West Media Limited (ASX:SWM) and Sims Metal Management Limited (ASX:SGM) followed lower.

Asian markets

Japan’s Nikkei has lost 0.6 per cent, Hong Kong’s Hang Seng has lost 0.5 per cent and the Shanghai Composite has lost 0.3 per cent.

Commodities and the dollar

Gold is trading at $US1,315 an ounce.
Light crude is $0.19 lower at $US62.22 barrel.
One Australian dollar is buying 77.01 US cents.

Cryptocurrencies

Bitcoin has gained 2 per cent to US$8,472, Ethereum fallen about 0.5 per cent to US$536 and Ripple has gained 4 per cent to US$0.69.