Banks fall behind : Aus shares 0.05% higher at noon

Market Reports

by Rachael Jones

The Australian share market opened higher this morning following little change at the end of trade on Wall Street. Mining and energy companies are up inside early trade. BHP Billiton (ASX:BHP), Woodside Petroleum (ASX:WPL), Newcrest (ASX:NCM), Rio Tinto (ASX:RIO), South32 (ASX:S32) and Santos (ASX:STO) are all among the market leaders this morning. The major banks have fallen behind though with the Commonwealth Bank the hardest hit. Oil prices have been sent into a spin after US President Trump announced his plans to exit the Iran nuclear deal and impose sanctions on the OPEC nation. Energy industry insiders say Trump's tough stance on Iran will probably keep oil and gasoline prices higher than they would otherwise be. The Energy sector is leading the way with the utlitiies sector is trailing behind.

Iron ore price remained steady at US$65.43 and futures are pointing to a rise of 0.32 per cent.

The S&P/ASX 200 index is up 3 points 0.05 per cent higher at 6,095. On the futures market the SPI is 1 point higher.

Local economic news

Investors are still digesting last night’s budget with a proposed $140 billion in income tax cuts over the next decade. The government announced a deficit of $14.5 billion but said it is on track to deliver a surplus of $2.2 billion in two years .

Company news

The Commonwealth Bank (ASX:CBA) has reached an in-principle agreement with the Australian Securities and Investments Commission (ASIC) to settle the legal proceedings in relation to claims of manipulation of the Bank Bill Swap Rate (BBSW).  As part of the in-principle settlement, CBA (ASX:CBA) will acknowledge that, in the course of trading on the BBSW market in Australia on five occasions between February and June 2012, CBA attempted to engage in unconscionable conduct in breach of the ASIC Act. CBA will also acknowledge it did not have adequate policies and systems in place to monitor the trading and communications of its staff in order to prevent that conduct from occurring.
The CBA has agreed to pay a $5 million penalty, a payment of $15 million to a financial consumer protection fund and a $5 million payment towards ASIC's costs of the litigation and its investigation. The impact of this settlement will be reflected in CBA's 2018 Financial Year results.

Shares in CBA (ASX:CBA) are down 3.22 per cent to $71.13.

Investment management firm Challenger (ASX:CGF) has welcomed the Federal Budget announcement that will transform the retirement phase of superannuation. They say the Retirement Income Framework reforms will significantly improve the standard of living for Australia’s retirees. The new means test rules will enable the development of new retirement income products.

Shares in Challenger (ASX:CGF) are up 5.25 per cent higher to $12.53.

Best and worst performers

The best performing sector is Energy adding 1 per cent to 11,252 points while the worst performing sector is Utlities, shedding 1.11 per cent to 7798 points.

The best performing stock in the S&P/ASX 200 is Wisetech Global (ASX:WTC), is up 5.6 per cent to $12.73, followed by shares in Challenger (ASX:CGF) and CYBG (ASX:CYB)

The worst performing stock in the S&P/ASX 200 is Greencross (ASX:GXL), dropping 20.7 per cent to $4.25, followed by shares in and Incitec (ASX:IPL). Seven West Media (ASX:SWM)

Asian markets

Japan’s Nikkei has lost 0.4 per cent, Hong Kong’s Hang Seng has added 0.02 per cent and the Shanghai Composite has lost 0.2 per cent.

Commodities and the dollar

Gold is trading at $US1312 an ounce.
One Australian dollar is buying 74.40 US cents.

Cryptocurrencies

The three most traded cryptocurrencies are trading lower today.

Bitcoin has fallen 2.6 per cent to US$9194 Ethereum fell about 3.3 per cent to US$744 and EOS has fallen about 3 per cent to US$17.73