LNG exports help GDP: Aus shares close higher

Market Reports

by Rachael Jones

It’s been a positive day of trade for the Australian share market. The market opened stronger then struggled to maintain momentum as it waited for the country’s GDP first quarter results – which were stronger than expected. Minerals and energy sectors advanced as all four major banks reported losses. While iron ore price gained 1.3 per cent to $US66.34 and its futures are pointing to a rise of 2.38 per cent. Copper prices have surged on concerns that workers at BHP’s Escondida mine in Chile could go on strike over wage concerns. Workers at the world's largest copper mine could repeat last year's 44-day strike according to the union which is demanding the largest one-time bonus in Chilean mining history. The Escondida mine is responsible for approximately 4.5 per cent of the world's copper supply.

At the closing bell, the S&P/ASX 200 index closed 30.20 points higher, or 0.50 per cent higher, to finish at 6025.10 points.

The value of trades was $6 billion on volume of 745 million shares at the close of trade. The top three stocks by value were Commonwealth Bank of Australia (ASX:CBA), and BHP Billiton (ASX:BHP) Westpac Banking Corporation (ASX:WBC)

The S&P/ASX 200 Futures are suggesting a rise of 27 points.

Economic news

The Australian economy has seen a strong 1 per cent growth in the first quarter above the 0.9 per cent consensus – beating expectations with a 3.1 per cent annual increase in GDP. The Australian Bureau of statistics data showed commodities were the key driver of growth in the March quarter. The mining sector’s output grew 2.9 per cent thanks to increases in coal, iron ire and LNG production. The result is an improvement on the previous quarter when GDP grew just 0.4 per cent. Analysts are expecting growth of around half a per cent. The market lost momentum just before the results were released – but is now tracking sideways. This comes after the Reserve bank left rates on hold yesterday.

Company news

CIMIC Group’s (ASX:CIM) global mining services provider, Thiess, has been awarded a $160 million contract extension by Coronado Curragh to continue to provide mining services at the Curragh Coal Mine in Queensland, Australia. Thiess has a long record of service at Curragh having operated at the project since 2004. Under the contract extension, Thiess will mine approximately 45 million bank cubic metres of waste and coal at Curragh’s North Pit, 30 ks north of Blackwater until June 2019. In addition, Thiess will continue delivery of its existing scope of works under its current $1.1 billion contract until 2021. Shares in CIMIC GROUP (ASX:CIM) closed 1.98 per cent lower at $40.18.

Agribusiness Elders (ASX:ELD) released their investor presentation today showing that winter cropping conditions are expected to be average with limited rainfall during April and May across most of Australia. This is expected to inhibit grower demand for cropping inputs in the second half. They recorded an underlying net profit after tax of $39.7m, up $4.5m and an operating cash inflow of $26.1m for the half, up from a cash outflow of $5.3m. In April this year Elders (ASX:ELD) announced the acquisition of Titan, an agricultural chemical supplier, which is expected to increase retail earnings in the second half. Shares in Elders (ASX:ELD) closed 1.73 per cent higher at $9.39.

More headlines

Wholesaler Metcash (ASX:MTS) has announced $352 million in asset impairments. This includes $318 million of goodwill and $34 million of other assets in the supermarkets and convenience pillar. The impairments come after Metcash revealed last week one of its largest independent grocery retailers, Drakes, planned to move to self-supply in South Australia. The company expects total supermarket sales to drop by 1.2 per cent and wholesale sales to decline by 3.6 per cent.

Orinoco Gold (ASX:OGX) says the Brazillian truck drivers strike which halted production at its Cascavel mine has now ended. The strike began on the 24th of May and left the state where the gold mine is located without a supply of diesel and oil.

Fund manager, Blue Sky Alternative Investments (ASX:BLA) has announced that KPMG is currently conducting an independent valuation of all assets managed by Blue Sky.
The valuation is part of the comprehensive valuation review process announced in April. The company’s shares have been hit hard after US short-seller Glaucas announced it was shorting the company earlier this year.

Best and worst performers

The best-performing sector was Energy, which added 2.43 per cent.
The worst-performing sector was Financials, which shed 0.76 per cent.

The best-performing stock in the S&P/ASX 200 was Wisetech Global Ltd (ASX:WTC), which rose 4.07 per cent to $15.87. Shares in Sandfire Resources (ASX:SFR) and Beach Energy Limited (ASX:BPT) followed higher.

The worst-performing stock in the S&P/ASX 200 was Retail Food Group (ASX:RFG), which fell 6.58 per cent to $0.71. Shares in Domino's Pizza (ASX:DMP) and Galaxy Resources (ASX:GXY) followed lower.

Asian markets

Japan's Nikkei has gained 0.38 per cent, Hong Kong's Hang Seng has gained 0.52 per cent and China's Shanghai Composite has lost 0.06 per cent.

Commodities and the dollar

Gold is trading at USD $1299.27 an ounce.
Light crude is trading $0.78 higher at USD $65.53 a barrel.
One Australian dollar is buying 76.66 US cents.


Bitcoin is trading 2.67 per cent higher at US$7632.12,
Ethereum is trading 3.81 per cent higher at US$608.75
and EOS is trading 7.12 per cent higher at US$14.08.