Inflation disappoints, ASX slips: Aus shares close 0.3% lower

Market Reports

by Jessica Amir

The Australian share erased yesterday’s some of yesterday’s gains finishing 0.3 per cent lower, despite commodity prices bouncing higher and mostly higher Wall Street leads.

From the open we had mostly positive leads from Wall Street and commodity prices rising after China advised it would use fiscal stimulus to bolster its economy. While, shares in Google’s parent Alphabet rose 4 per cent after it posted strong earnings.

However, most of the market finished in the red, after inflationary data missed expectations, while the Australian dollar continues to trade at year lows.

Only three sectors finished with a profit, with miners mustering up the most after the Aluminium hit a two-week high, gold pushed, along with oil prices, while the iron ore price did lose ground (0.3 per cent), taking it to US$65.57. But it’s higher on the week and its futures are suggesting a rise of 0.42 per cent.

We saw BHP (ASX:BHP) rise the most among the heavyweights, [2.2 per cent], with Alumina (ASX:AWC) gaining 2.2 per cent and Rio (ASX:RIO) rising 1.5 per cent.

At the closing bell the S&P/ASX 200 index closed 0.29 per cent or 18 points lower, at 6,248, at 10-year highs. 

Futures market

Dow futures are suggesting a fall of 15 points up.
And the ASX200 futures are eyeing a 15 point fall.

Value of trades

$5.2 billion on volume of 651 million shares at the close of trade. The top three stocks by value were BHP Billiton Limited (ASX:BHP), Westpac (ASX:WBC) and Commonwealth Bank of Australia (ASX:CBA).

Economic news

Australian inflationary data missed expectations, after the Consumer Price Index (CPI) rose 2.1 per cent for the year to the June quarter 2018, (missing the 2.2 per cent expected). Even though it’s in line with RBA Governor and Treasurer target of 2–3 per cent of inflation, as it missed expectations, the market didn’t like that.

As for the June quarter 2018, the Consumer Price Index (CPI) rose 0.4 per cent according to Australian Bureau of Statistics (ABS), also less than expected (0.5 per cent).

Company news

First up, in small caps, Horizon Oil (ASX:HZN) saw a 46 per cent increase in its revenue on the 2017 financial year, with its revenue hitting US$100 million in the 2018 fiscal year, while its net operational cash flow rose 45 per cent over the same respective periods. Meantime, its oil sales and total sales for the quarter also grew in double digits. That saw its shares rally today and Horizon Oil (ASX:HZN) shares closed 22.7 per cent higher at $0.14.

Wattle Health (ASX:WHA) received Chinese approval for its pure Australian grass fed milk powder (1 kilo bag) to be sold in China. The range, SKU, will increase brand awareness and sales in China. Shares in Wattle Health (ASX:WHA) soared 8.13 per cent higher.

Unibail-Rodamco-Westfield (ASX:URW) inked a sales agreement for Capital 8 office building in Paris, selling the tower for €789 million.

Pinnacle Investment Management (ASX:PNI) announced the completion of its institutional placement, raising $60 million. The placement was undertaken to fund the acquisition of a 35 per cent stake in Metrics Credit Partners and a 40 per cent stake in Omega Global Investors, as well as to providing funding for other growth initiatives.

CSR (ASX:CSR) has responded to queries regarding its Viridian glass business, saying it’s assessing potential sale interest in selling the Viridian assets to external parties. CSR says it will assess the potential interest over the next few months.

Best and worst performers of the day

The best performing sector was materials adding 1.02 per cent while the worst performing sector was staples, shedding 1.5 per cent.

The best performing stock in the S&P/ASX 200 was CIMIC Group Limited (ASX:CIM), rising 4.7 per cent to close at $49.83. Shares in Independence Group Nl (ASX:IGO) and Syrah Resources Limited (ASX:SYR) followed higher.

The worst performing stock in the S&P/ASX 200 was Greencross Limited (ASX:GXL), dropping 6.5 per cent to close at $4.19. Shares in Tassal Group Limited (ASX:TGR) and Nufarm Limited (ASX:NUF) followed lower.

Asian markets

Mixed: Japan’s Nikkei has gained 0.5 per cent, Hong Kong’s Hang Seng has risen 0.7 per cent and the Shanghai Composite has lost 0.14 per cent.

Commodities and the dollar

Gold is trading at $US1,226 an ounce.
Light crude is $0.87 up at $US68.76 barrel.
One Australian dollar is buying 73.93 US cents.

Cryptocurrencies

Some of the most traded cryptocurrencies are trading higher. Bitcoin has gained 5.1 per cent to US$8,345, Ethereum has gained 3.9 per cent to US$479 and EOS has added the most, about 9.9 per cent to US$8.80.