Income tax cuts push ASX up: Aus shares close 1% higher

Market Reports

by Jessica Amir

Australian shares keep raising the bar and have set a new 10-year high. Earlier today the ASX200, or top 200 stocks hit 6,250 points earlier in the session. But at the closing bell the S&P/ASX 200 index finished 60 points, or almost 1 per cent [0.96 per cent] higher at 6,232.

Year-on-year the share market has gained 16.5 per cent. Today the feather in our cap came from income tax cuts being passed in the Senate in all-or-nothing vote. Income taxes will be cut over the next seven years, staring next financial year (FY19), costing the government $144 billion in revenue.

But, who stands to benefit the most? High-income earners, with someone on $200,000 per year, getting more than $7,200 per year in their back-pocket from 2025. On the other spectrum, if earn $50,000, you’ll save about $500 per year.

The staples and discretionary players boded the best today, leading most of the sector higher, with Bellamy’s Australia (ASX:BAL) rising over 6 per cent and Wesfarmers (ASX:WES) gaining over 2.6 per cent while outdoor advertising business APN Outdoor (ASX:APO) saw a huge rally after receiving a takeover offer, while telcos continued to cap gains today.

Iron ore price gained 1.4 per cent higher to US$65.49 and its futures are eyeing a gain of 0.3 per cent, with BHP (ASX:BHP) gaining the most out of the iron ore majors today, up 0.5 per cent.

Futures market

The Dow Jones Futures are suggesting a rise of 67 points.
The S&P/ASX 200 Futures are suggesting a rise of 57 points.

Value of trades

$8.9 billion on volume of 993 million shares at the close of trade. The top three stocks by value were Commonwealth Bank of Australia (ASX:CBA), Westpac Banking Corporation (ASX:WBC) and BHP Billiton (ASX:BHP).

Company news

Gateway Lifestyle (ASX:GTY) has granted Brookfield Property Group exclusive due diligence for six weeks, after it made a $695 million takeover offer for the over 50s residential community company. Gateway reminds its shareholders not to take any action and that there is no guarantee a formal takeover offer will be made for the company. Gateway Lifestyle (ASX:GTY) shares gained 6.54 per cent today to $2.28.

Outdoor advertising company, APN Outdoor (ASX:APO) shares jumped to a one year high after it received a $1.1 billion takeover offer, from French company, JCDecaux SA offering to buy its shares for $6.52 a share. The takeover offer price is almost a 12 per cent premium to APO’s share price on 20 June 2018. 

Atlas Iron (ASX:AGO) is recommending shareholders accept Gina Rinehart’s Redstone Corp’s $390 million takeover offer (for all of AGO’s shares for 4.2 cents per share). Atlas Iron will also have to pay $3.12 million in break frees for withdrawing from the inferior Mineral Resources takeover. Gina Rinehart’s company already owns a 20 per cent stake, her daughter (Bianca Hope Rinehart) owns 20 per cent, Fortescue Metals (ASX:FMG) owns 20 per cent, and Macquarie Group (ASX:MGQ) has about 6 per cent.

Global logistics company, Wisetech Global (ASX:WTC) has snapped up a leading US parcel transport management solution (TMS) business, Pierbridge for $37 million upfront, with a further earn out potential of up to $22.4 million. 

Ramsay Health Care (ASX:RHC) slashed its full-year core earnings per share (EPS) growth to 7 per cent rather than the 8 to 10 per cent expected in FY18. It comes as its UK hospitals face a slowdown in inpatient admissions, in what they are calling a ‘challenging environment’. As a result, it will write down $125 million for the period.

IPOs

Investment fintech, Raiz Invest (ASX:RZI) started trading today, floating with an issue price of $1.80, it opened at $1.79 and closed at $1.40.The company has a phone app which allows you to round-up your ETF transactions and invest them either into a portfolio of shares (ETFs) or into your superannuation.

Best and worst performers of the day

The best-performing sector was Consumer Staples, adding 2.15 per cent. The worst-performing sector was Telco Services, shedding 1.72 per cent.

The best-performing stock in the S&P/ASX 200 was APN Outdoor (ASX:APO), which rose 12.14 per cent to $6.56. Shares in Appen Limited (ASX:APX) and Gateway Lifestyle (ASX:GTY) followed higher.

The worst-performing stock in the S&P/ASX 200 was Ramsay Health Care (ASX:RHC), which fell 7.53 per cent to $57.49. Shares in TPG Telecom (ASX:TPM) and Vocus Group Ltd (ASX:VOC) followed lower.

Asian markets

Japan's Nikkei has gained 0.66 per cent, Hong Kong's Hang Seng has lost 0.85 per cent and China's Shanghai Composite has lost 0.83 per cent.

Commodities and the dollar

Gold is trading at USD $1263.07 an ounce.
Light crude is trading $0.44 higher at USD $65.34 a barrel.
One Australian dollar is buying 73.49 US cent

Cryptocurrencies

Bitcoin is trading 2 per cent higher at US$6,771.17, Ethereum is trading 3.3 per cent higher at US$541 and EOS trades 3.3 per cent higher at US$10.61.