Rates held for 2 years: Aus shares close 0.3% lower

Market Reports

by Jessica Amir

The Australian share market has erased about half of yesterday’s gains, with profit downgrades ahead of reporting season holding back the ASX on Tuesday.

The ASX fell at the open after Eclipx Group (ASX:ECX) shares lost over 40 per cent after dropping its profit guidance. We also saw the ASX200 remain underwater, with about half of the sectors making a loss.

As the stand out shiners, Beach Energy (ASX:BPT) rose 4.7 per cent and LendLease Group (ASX:LLC) gained 1.6 per cent after being upgraded to a buy by Goldman Sachs.

Materials closed in the red, despite the iron ore price gaining 2.5 per cent US$69.11, hitting its highest level since early March, and iron ore futures are pointing to a rise of 1.1 per cent.

At the closing bell the S&P/ASX 200 index closed 19 points lower, or 0.3 per cent lower to finish at 6,254.

Futures market

Dow futures are suggesting a rise of 57 points.
S&P500 futures are suggesting a rise of 3 points.
Nasdaq futures are suggesting a rise of 16 points.

And the ASX200 futures are eyeing a 13 point fall.

Value of trades

$5.4 billion on volume of 703 million shares at the close of trade. The top three stocks by value were Commonwealth Bank of Australia (ASX:CBA), Amcor (ASX:AMC) and Westpac (ASX:WBC).

Economic news

The RBA has kept rates on hold for the 22nd time, keeping rates at 1.5 per cent for the last two years. Rates were last dropped by 0.25 per cent on 3 August 2016.

Company news

Pilbara Minerals (ASX:PLS) presented at the Diggers And Dealers forum overviewing its Pilgangoora project and processing plant, with its spodumene tantalite resource that’s one of the biggest in the world. Shares in Pilbara Minerals (ASX:PLS) closed 2.8 per cent lower at $0.88.

Fleet leasing and financial services company, Eclipx Group (ASX:ECX) dropped its net profit guidance for the financial year 2018 to be 13 to 17 per cent higher than the same time last year, instead of the previous guidance of 27 to 30 per cent growth. The company says it comes as GraysOnline has been being affected by both by a ten-year low in bank initiated insolvencies in Australia, and a buoyant construction industry, resulting in reduced auctioned equipment disposals.

Amcor (ASX:AMC) has announced it will acquire US competitor Bemis Co, in an all-stock combination, valued at US$6.8 billion.

Navitas (ASX:NVT) has announced it swung into after tax loss territory in the 2018 financial year, hitting a loss of $55.3 million, while it saw a profit for the same time last year of $81 million. However, it announced it’s been affected by a one off charge of $129 million (for termination payments and campus merger costs).

Financial services company, IOOF Holdings (ASX:IFL) advised its underlying net profit (UNPAT) rose by 13 per cent to $191.4 million when compared to the prior year.

Best and worst performers of the day

The best performing sector was Energy adding 0.8 per cent, while the worst performing sector was Telco Services, shedding 1.5 per cent.

The best performing stock in the S&P/ASX 200 was Beach Energy (ASX:BPT), rising 4.7 per cent to close at $2.00. Shares in Northern Star Resources (ASX:NST) and Santos (ASX:STO) followed higher.

The worst performing stock in the S&P/ASX 200 was Eclipx Group (ASX:ECX), dropping 40.8 per cent to close at $1.80. Shares in Amcor (ASX:AMC) and Ausdrill (ASX:ASL) followed lower.

Asian markets

Higher:Japan’s Nikkei has added 0.7 per cent, Hong Kong’s Hang Seng has added 1.2 per cent and the Shanghai Composite has gained 1.9 per cent.

Commodities and the dollar

Gold is trading at $US1,212 an ounce.
Light crude is $0.41 up at $US68.90 barrel.
One Australian dollar is buying 74.13 US cents.

Cryptocurrencies

Bitcoin has fallen 2 per cent to US$6,963, Ethereum fallen about 1 per cent to US$407 and Ethereum Classic has gained about 10 per cent to US$19.22.