ASX snaps uptrend, M&A activity dominates: ASX 0.1% lower at noon

Market Reports

by Jessica Amir

The Australian share market has broken its upward trend and is making its second day of losses with half of the major sector trading lower on Monday.

Tech stocks are down the most following Wall Street’s lead after the Nasdaq lost 1.7 per cent on Friday on US economic outlook concerns, with the S&P500 losing 0.9 per cent and the Dow Jones losing 0.8 per cent.

Financial stocks are following tech stocks lower with Xero (ASX:XRO) and Moelis Australia (ASX:MOE) losing over 4 per cent.

Mining stocks also trade lower with the Nickel price sliding to an 11 month low on Friday.

Meanwhile, Healthscope (ASX:HSO) and Elders (ASX:ELD) are leading the rally in top 200 stocks.

Broker moves

LendLease (ASX:LLC) has been downgraded by Citi from a buy to a neutral position on the back of the $350 million after-tax provision on the back of a further deterioration in engineering projects. It's trading 5.4 per cent lower.

James Hardie Industries (ASX:JHX) has upgraded to a buy by Citi, with a 12-month price target of $21.00. Citi also says the recent sell-off on the back of its second quarter 2019 'results miss' appears to be overdone. Citi says the margin squeeze is ‘likely temporary and a buying opportunity is emerging. It’s trading 1.5 per cent.

The S&P/ASX 200 index

8 points or 0.1 per cnet lower at 5,914. On the futures market the SPI is 3 points higher.

Company news

Australian-based agribusiness, Elders Limited (ASX:ELD) reported a two per cent lift in its revenue for the year ending 30 September 2018 to $1.6 billion, while its attributable profit after tax slipped 38 per cent to $71.6 million in the period. as for its underlying EBIT, that grew 5 per cent to $74.6 million (compared to the prior corresponding period). Over the year it declared a final and interim dividend of 9 cents fully franked per period. Shares in Elders Limited (ASX:ELD) are trading 10.7 per cent higher at $8.20 at noon.

Woolworths (ASX:WOW) has announced its chief legal officer and company secretary Richard Dammery will step down late January 2019 after he helped the group with various petrol transactions, including its most recent sale of the Woolworths petrol business for $1.7 billion to EG Group. Richard has been with the board for the last four years. Marcin Firek remains company secretary. Meantime, Citi has marked Woolworths' stock as a buy, with a price target of $33.00 as the transaction is 'broadly in line with expectations' and 'paves the way' for a possible $1.5 billion to $2 billion capital return. Woolworths (ASX:WOW) shares are trading higher for the 11th day, today it’s trading 1.1 per cent higher at $29.74 at noon, taking the stock back to August 2018 levels.

Best and worst performers

The best performing sector is Utilities adding 1.7 per cent, while the worst performing sector is Financials, shedding 0.6 per cent.

The best performing stock in the S&P/ASX 200 is Healthscope (ASX:HSO), rising 13.2 per cent to $2.35 (after it received a $4.5 billion takeover offer Brookfield). Following is shares in Elders Limited (ASX:ELD) and Lynas Corporation Limited (ASX:LYC).

The worst performing stock in the S&P/ASX 200 is Steadfast Group Limited (ASX:SDF), dropping 7.98 per cent to $2.83, followed by shares in Lendlease Group (ASX:LLC) and Wisetech Global Limited (ASX:WTC).

Commodities and the dollar

Gold is trading at US$1,211 an ounce.
Iron ore price rose 1.2 per cent to US$77.20 and its futures are pointing to a fall of 1.5 per cent.
One Australian dollar is buying 72.27 US cents.

Cryptocurrencies

Bitcoin has gained 0.1 per cent to US$6,412, Ethereum has lost about 0.2 per cent to US$212 and EOS has gained about 0.4 per cent to US$5.42.