Healthcare slips further from all time high: Aus shares close 0.5% lower

Market Reports

by Jessica Amir

The Australian share market broke its six-day rally, entering negative territory with a 0.5 per cent loss on Monday.

Healthcare led the drag, after it lost over 2 per cent, leading all sectors lower, except financials. The health sector itself has been strong over the last 12 months and hit an all-time high in September.

Financials were the only sector making a minor gain today, despite Ernst & Young releasing a report about Australia’s major banks, saying they’re seeing a profit squeeze of 5.5 per cent, compared to 2017. On top of that, combined return on equity has fallen by 12.2 per cent for the major banks, on the back of increased remediation and compliance costs.

At the closing bell the S&P/ASX 200 index closed 31 points lower, or 0.5 per cent lower to finish at 5,818.

Futures market

Dow futures are suggesting a fall of 83 points.
S&P 500 futures are eyeing a dip of 9 points.
The Nasdaq futures are eyeing fall of 14 points.
And the ASX200 futures are eyeing a 21 point fall tomorrow morning.

Most traded stocks

The top three stocks by value were BHP Billiton Limited (ASX:BHP), Rio Tinto (ASX:RIO) and National Bank of Australia (ASX:NAB).

Economic news

Australia’s services sector slowed in October, falling 1.4 points to a reading of 51.1, slower growth than September and the average in 2018. It also came as a surprise as the sector was expected to expand from a reading of 52.5 to 53.5. But the reading is still above the 50-point (expansionary territory level) and has been for the 20th month.

Company news

Centuria Capital (ASX:CNI) saw some profit taking today. Centuria is one the largest security holders of Propertylink Group (ASX:PLG) with a 19.5 per cent stake in Propertylink Group, that’s been made a $723 million, takeover offer by ESR Real Estate. Today, Centuria Capital (ASX:CNI) closed 1.1 per cent lower at $1.30. Its shares have been on a tear since late 2012.

Industry Super Holdings sold down their major holding in Kogan (ASX:KGN). It comes just a week after Kogan announced its global brands revenue fell 27 per cent in the first quarter of FY19, compared to the same time last year. It rose 0.4 per cent today at $2.72

Westpac (ASX:WBC) reported a 1 per cent lift in its net profit after tax attributable to shareholders, to $8.1 billion for the year ending 30 September 2018. Its revenue rose 2 per cent to $22 billion with a final and interim dividend of 94 cents fully franked (each period). The results were broadly in line with expectations. Bell Potter has maintained its hold recommendation on the stock.

Veterinary services company, Greencross Limited (ASX:GXL) has entered into an implementation agreement with TPG Capital Asia and TPG Growth to take over the firm, buying its shares for $5.55 per share. It implies an equity value of $675 million, with an enterprise value of $970 million. The takeover is subject to a number of conditions and shareholders don’t need to take any action at this point in time.

Hearing implant company Cochlear (ASX:COH) is set to appeal a US$268 million case patent infringement lawsuit in the US, which was filed by Alfred E. Mann Foundation for Scientific Research (“AMF”) and Advanced Bionics LLC (“AB”). The appeal is expected to take about two years, thus Cochlear will review its initial $21.3 million provision.

Best and worst performers of the day

The best performing sector was Financials adding 0.2 per cent while the worst performing sector was Healthcare, losing 2.2 per cent.

The best performing stock in the S&P/ASX 200 was TPG Telecom (ASX:TPM), rising 3.3 per cent to close at $7.77. Shares in Pact Group (ASX:PGH) and Speedcast (ASX:SDA) followed higher.

The worst performing stock in the S&P/ASX 200 was Emeco Holdings (ASX:EHL), dropping 7.8per cent to close at $0.29. Shares in Eclipx (ASX:ECX) and Bingo Industries (ASX:BIN) followed lower.

Asian markets

Lower: Japan’s Nikkei has lost 1.4 per cent, Hong Kong’s Hang Seng has lost 2.5 per cent and the Shanghai Composite has shed 1.3 per cent.

Commodities and the dollar

Gold is trading at US$1,232 an ounce.
Iron ore price fell 1.7 per cent to US$73.97.
Light crude is US$0.55 lower at US$63.14 barrel.
One Australian dollar is buying 71.89 US cents.

Cryptocurrencies

Bitcoin has gained 0.7 per cent to US$6,417, Ethereum has gained 4.2 per cent to US$208 and Bitcoin Cash has gained 4.8 per cent to US$541, in the last 24 hours.