ASX gains 3.4% this week on banking RC rally: ASX slips 0.3% lower on Friday

Market Reports

by Jessica Amir

The Australian share market closed the week on a four-month high, but fell 0.3 per cent today amid political uncertainty, as US President Donald Trump blocked a meeting with Chinese President Xi Jinping before the key trade deal March 2 deadline.

Half of the sectors closed lower today with Energy leading the drag after the sector lost 2.6 per cent on the US crude price slipping 2.5 per cent after Trump told CNBC it was ‘highly unlikely’ the meeting would happen in coming weeks.

At the closing bell the S&P/ASX 200 index closed 21 points lower, or 0.3 per cent lower to finish at 6,072. Over the week we gained 209 points/3.4 per cent.

We had negative leads from the outset, with Wall Street closing lower, and the tech-heavy Nasdaq down the most, 1.2 per cent, while the S&P 500 lost 0.9 per cent and the Dow followed lower. 


Dow futures are suggesting a fall of 115 points.
S&P 500 futures are eyeing a fall of 13 points.
The Nasdaq futures are eyeing a fall of 40 points.
And the ASX200 futures are eyeing a 28 point fall Monday morning

Local economic news

The Statement of Monetary Policy was released from the RBA, with the central bank revising its inflation outlook lower. It also noted dwelling investment will decline and weaker housing construction and prices could have 'pervasive economic effects'. Meantime, the RBA expects the unemployment rate will move lower, leading to a pick up in wage growth.

Company news

Beach Energy (ASX:BPT) erased about two weeks of gains today after the oil price fell on the back of US-China trade disputes, with the crude price trading around US$52.64. The share price fall comes ahead of the company reporting its HY results next Wednesday. At the end of January, Beach Energy upgraded its production guidance on the back of better than expected production in the first half of 2019. Its FY19 guidance rose to the range of 28 to 29 MMboe. Changing pace, we have seen the oil prices decline significantly in recent months, on the back of global oil supplies increasing in the second half of 2018. The RBA today also highlighted in its Monetary Policy Statement, that OPEC and a number of non-OPEC countries agreed to cut production by 1.2 million barrels per day. And over recent weeks, prices have been supported by Saudi Arabia increasing its commitment under the OPEC production cuts. Shares in Beach Energy (ASX:BPT) closed 9.7 per cent lower at $1.64.

News Corp (ASX:NWS) reported a 21 per cent rise in its revenues for the second quarter, to $2.6 billion. It came on the back of consolidation of Foxtel and growth in its book publishing and digital real estate services departments. Its total earnings (EBITDA) also gained over the period, rising to $370 million, compared to the prior corresponding period.

REA Group (ASX:REA) announced its net profit after tax rose 20 per cent to $176.6 million for the first half of the 2019 financial year, despite the Australian property market cooling. Its revenue grew by 15 per cent (compared to the same time last year) on the back of a strong rise in its residential business, with its revenue hitting $469.2 million. Its earnings (EBITDA) rose by 19 per cent to $289.1 million

The National Australia Bank (ASX:NAB) announced after market close yesterday, that both its chairman and CEO resigned, just days after the financial services Royal Commission was wrapped up. CEO Andrew Thorburn finish on 28 February and Phil Cronican to act as CEO until a new permanent CEO has been hired, which is when Chairman Ken Henry will depart.

Best and worst performers 

The best performing sector was REITs, adding 0.9 per cent while the worst performing sector was Energy, shedding 2.6 per cent.

The best performing stock in the S&P/ASX 200 was News Corporation (ASX:NWS), rising 2.7 per cent to close at $18.82. Shares in Evolution Mining (ASX:EVN) and NIB Holdings (ASX:NHF) followed higher.

The worst performing stock in the S&P/ASX 200 was Beach Energy (ASX:BPT), dropping 9.7 per cent to close at $1.64. Shares in Domain Holdings Australia (ASX:DHG) and CYBG (ASX:CYB) followed lower.

Asian markets 

Japan’s Nikkei has lost 2 per cent, Hong Kong’s Hang Seng has lost 0.5 per cent and the Shanghai Composite has gained 1.3 per cent.

Wall Street

Wrapped up the four trading days this week on a mixed note: The Dow Jones added 0.4 per cent, The S&P 500 lost 0.02 per cent and the tech-heavy Nasdaq gained 0.3 per cent.

Commodities and the dollar

Gold is trading at US$1,309 an ounce.
Iron ore last traded at US$85.53.
Light crude is $1.40 down at US$52.61 barrel.
One Australian dollar is buying 70.74 US cents.

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