ASX falls to a 20-month low: ASX closes 0.6% lower

Market Reports

by Rachael Jones

The Australian share market closed lower but saw an afternoon recovery with the financial index gaining with all big four banks seeing a rise. BHP Billiton (ASX:BHP) also saw gains – they announced a name change today and reached a settlement with the ATO . Wesfarmers (ASX:WES) also saw gains after their demerger from Coles became effective today. Stay tuned for more on these stories. At the closing bell the S&P/ASX 200 index closed 22 points lower, or 0.4 per cent lower to finish at 5,672.

Futures market

Dow futures are suggesting a fall of 73 points.
S&P 500 futures are eyeing a dip of 6 points.
The Nasdaq futures are eyeing fall of 24 points.
And the ASX200 futures are eyeing a 31 point fall tomorrow.

Economic news

RBA Minutes from the November 2018 Monetary Policy Meeting shows that the labour market has been stronger than expected, inflation is returning to the midpoint of its target and that housing borrowing and markets continue to ease on the back of tighter credit conditions.

Just some of the reasons the RBA kept interest rates on hold at 1.5 per cent, with inflation being at 1.9 per cent and the Australia dollar hovering around 73.00 US cents.

Company news

Medical equipment company Paragon Care (ASX:PGC) has completed its second tranche placement to China Pioneer Pharma. Pioneer Pharma Australia is a wholly owned subsidiary of Honk Kong listed China Pioneer Pharma holdings. Shares were issued at a price of over $0.89 cents per share. Almost 34 million fully paid ordinary shares were issued. Shares in Paragon Care (ASX:PGC) 0.7 per cent lower at $0.73.

Coles Group is now officially its own company after Wesfarmers (ASX:WES) announced the demerger is effective. It comes as Supreme Court orders were lodged with the Australian Securities and Investments Commission. Coles will begin trading tomorrow with WES to retain a 15 per cent take in the new listed entity and it will take a 50 per cent holding in Flybuys. Each WES shareholder will receive 1 new Coles shares. Shares in Wesfarmers (ASX:WES) are trading 0.1 per cent lower at $43.81 at noon.

Software as a service (Saas) company, Technology One (ASX:TNE) announced its ninth consecutive year of record profit and revenues with its net profit after tax rising 15 per cent to $66.5 million for the year ending 30 September 2018.

One of largest listed NZ companies, Fletcher Building (ASX:FBU) has seen its shares in Australia fall to a six-year low, after announcing its earnings first-half earnings (EBIT) will be 10 per cent lower than its first half 2018 and its full 2019 EBIT, before significant items, should now sit between $630 to $680 million. It comes on the back of the Australian residential market slowing down and seeing a reduction in land development.

And BHP Billiton (ASX:BHP) has today announced a name change to BHP Group and BHP Group Plc respectively. It comes after BHP reached a settlement agreement with the Australian Taxation Office over the transfer pricing dispute relating to its marketing operations in Singapore. As part of the settlement BHP will pay a total of $529 million in additional taxes for years 2004 to 2018. The dispute related to the amount of Australian tax payable as a result of the sale of BHP's Singapore marketing business.The settlement fully resolves the longstanding dispute between BHP and the ATO for all prior years, being 2003 to 2018.

IPOs

Technology company, Shekel Brainweigh Ltd (ASX:SBW) started trading today. They floated with an issue price of $0.35, opened at $0.35 and it closed at $0.37.

Best and worst performers 

The best performing sector was Financials excluding REIT adding 0.5 per cent while the worst performing sector was Healthcare, shedding 2.5 per cent.

The best performing stock in the S&P/ASX 200 was Saracen Minerals (ASX:SAR), rising 3.2 per cent to close at $2.60. Shares in Pact Group Holdings (ASX:PGH) and St Barbara (ASX:SBM) followed higher.

The worst performing stock in the S&P/ASX 200 was Fletcher Building (ASX:FBU),dropping 10.8 per cent to close at $4.62. Shares in Altium (ASX:ALU) and Orocobre (ASX:ORE) followed lower.

Asian markets

Japan’s Nikkei has lost 1.2 per cent, Hong Kong’s Hang Seng has lost 1.9 per cent and the Shanghai Composite has lost 1.7 per cent.

Commodities and the dollar

Gold is trading at US$1,223 an ounce.
Iron ore price rose 1.1 per cent to US$76.11. Its futures are pointing to a fall of 1 per cent.
Light crude is US$0.70 up at US$57.38 a barrel.
One Australian dollar is buying 72.76 US cents.

Cryptocurrencies

Some of the most traded cryptocurrencies are trading lower: Bitcoin has fallen 14.8 per cent to US$4711, Ethereum has fallen 1.1 per cent to US$145 and XRP is 14 per cent lower US$0.48, in the last 24 hours.