The Australian share market latched onto strong leads from US markets buoyed by a positive start to their earnings season to extend its gains, spending the morning in positive territory to be 1.2 per cent stronger at noon. REIT’s are the only major sector trading lower at this stage, while a flat consumer sentiment result has failed to deter investor optimism.
The S&P/ASX 200 index is 61 points up at 4,942. On the futures market the SPI is 66 points higher.
Economic news
The Westpac- Melbourne Institute’s index of consumer sentiment has come in flat in July, edging down 0.1 per cent to 102.21, from 102.2 in June. The index is holding steady in plus 100 positive territory, however has dropped considerably from a peak of 110.54 in March.
Company news
Air New Zealand Limited
(ASX:AIZ) has responded to the ACCC’s draft determination to re-authorise its Trans-Tasman alliance with Virgin Australia Holdings Limited
(ASX:VAH) for three more years, albeit requiring the airlines to maintain capacity on certain routes due to competition concerns. Air New Zealand welcomes the draft determination, however says it believes capacity conditions are not necessary in the current market structure and will work with the competition watchdog to understand its rationale for requiring such conditions. Shares in Air New Zealand are trading steady at $1.22.
Meanwhile, Macquarie Equities analysts have said Qantas Airways Limited
(ASX:QAN) and Virgin Australia Holdings Limited
(ASX:VAH) are set to be struck by a flow on of the slowdown in mining activity in Australia. Macquarie expects the airlines to experience reduced passenger demand over the next year, particularly in routes dominated by mining workers, pulling demand below the longer term growth rate of 3 to 4 per cent in the domestic market. Shares in Qantas are trading up 3.03 per cent at $1.36.
Best and worst performers The best performing sector is Materials gaining 175 points to 8,783. Shares in Resolute Mining Limited
(ASX:RSG) have risen 8.48 per cent and trading at $0.61. Shares in Fortescue Metals Group Limited
(ASX:FMG) and Newcrest Mining Limited
(ASX:NCM) are also stronger.
The worst performing sector is Real estate investment trusts, the only major sector down, falling 5 points to 1,040. Shares in Goodman Group
(ASX:GMG) have fallen 2.16 per cent, trading at $4.75. Shares in Westfield Group
(ASX:WDC) and BWP Trust
(ASX:BWP) are also lower.
Gold and the dollar
Gold is trading at $US1,246 an ounce and the Australian dollar is buying $US0.9181.
