Capital expenditure falls 2.8% in the December quarter: ASX tracking 0.8% lower at noon

Market Reports

by Rachael Jones

The Australian share market failed to maintain momentum this morning where it rose slightly in early trade, dipping to now track 0.8 per cent lower at noon. Shares in the a2 Milk Company (ASX:A2M) rose after they released their half year figures showing continued growth in their infant nutrition segment and a boost in sales across Australian and the US. Link Administration (ASX:LNK) shares fell after their company half year results were down facing current headwinds in their Corporate Markets business in the UK and Retirement & Superannuation Solutions. The best-performing sector is Healthcare, while the worst performing sector is Energy.

The S&P/ASX 200 index is 51 points down at 6,657. On the futures market the SPI is 24 points lower.

Local economic news

The trend estimate for total new capital expenditure fell by -1.4% in the December quarter 2019. This follows a fall of -1.3% in the September quarter 2019.

Broker moves

Citi has upgraded Adelaide Brighton (ASX:ABC) to a Neutral from a Sell.
It is Citi's view that the next upturn in construction activity is not likely to materialise before 2021
Target price is unchanged at $3. Forecasts have been reduced on weaker-than-expected guidance.
Shares in Adelaide Brighton (ASX:ABC) are currently 4.9 per cent higher at $3.02.

Company news

AP Eagers (ASX:APE) is to sell the AHG Refrigerated Logistics division to Anchorage Capital Partners for $100 million on a debt and cash free basis. The sale will result in a reduction in AP Eagers' net debt of approximately $95 million. Refrigerated Logistics comprises all of the transport and warehousing operations, and associated employees, of Rand, Harris, Scott’s and JAT. Completion of the transaction is expected to occur in the first half of 2020. Shares in AP Eagers (ASX:APE) are currently 3.4 per cent higher at $8.78.

Best and worst performers

The best-performing sector is Healthcare adding 0.7 per cent, while the worst performing sector is Energy at 1.9 per cent lower.

The best performing stock in the S&P/ASX 200 is Costa Group Holdings (ASX:CGC) rising 6.3 per cent to $3.04, followed by shares in The a2 Milk company (ASX:A2M) and Adelaide Brighton (ASX:ABC).

The worst performing stock in the S&P/ASX 200 is Link Administration Holdings (ASX:LNK), dropping 10.2 per cent to $5.19, followed by shares in Clinuvel Pharmaceuticals (ASX:CUV) and News Corp (ASX:NWS).

Commodities and the dollar

Gold is trading at US$1,646 an ounce.
Iron ore price is 3 per cent lower at US$88.10.
Iron ore futures are pointing to a fall of 2.4 per cent.
One Australian dollar is buying 65.53US cents.

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