US, China trade war truce boosts markets: ASX closes 1.8% higher

Market Reports

by Jessica Amir

The Australian share market kicked off the Santa rally in December on a high with a profit of 1.8 per cent, after we clawed back from our loss on Friday and then added an extra margin taking the market back to where it sat on 14 November, at 5,771 points, after we gained 104 points today.

From the get-go, we had positive leads to follow with all the US indices up 0.8 per cent each on Friday, on hopes of a US-China trade deal, which later came through and rocketed up the Australian dollar to a five-day high.

During our session today the oil price gained 5.3 per cent after the US and China agreed to a 90-day trade war truce.

That left the Energy sector with a gain of 4.6 per cent, Materials followed 3 per cent higher. Healthcare and Info Tech added over 2 per cent, while the other sectors added about at least 1 per cent.

Futures market

Dow futures are suggesting a rise of 468 points.
S&P 500 futures are eyeing a rise of 47 points.
The Nasdaq futures are eyeing a rise of 150 points.
And the ASX200 futures are eyeing a 92 point rise tomorrow morning

Company news

Wesfarmers (ASX:WES) completed the $860 million sale of its 40 per cent interest in the Bengalla JV to its partner firm, New Hope Corporation (ASX:NHC). As a result, it will see a pre-tax profit on the sale of $670 million to $680 million in WES’ 2019 half-year results. Wesfarmers added 0.4 per cent today, closing at $31.71

Graincorp (ASX:GNC) gained 26.7 per cent after it received a $2.4 billion non-binding takeover proposal from investment manager, Long-Asset Term Partners for $10.42 per share. The proposal is subject to a number of conditions and involves a complex finance structure with significant leverage. The board has advised shareholders not to take any action until it has completed its ongoing portfolio review. Year-on-year its shares have added 20 per cent.

Syrah Resources (ASX:SYR) reported a lift in graphite recoveries, from 53 per cent in the third quarter of 2018 to 74 per cent in November with high-grade consistency. It also advised it’s on track to achieve its full-year 2018 production target. Its shares gained 11 per cent today. And have been trending higher from late October, after hitting multi-year lows. Year-on-year its shares have fallen 59 per cent. 

Santos' (ASX:STO) JV project in Darwin, the Bayu Undan infill program has been completed ahead of time and 40 per cent under budget, lifting its shares almost 9 per cent higher at noon and its 13 per cent higher year-on-year.

Best and worst performers of the day

The best performing sector was Energy adding 4.6 per cent while the worst performing sector was Financials, gaining 0.80 per cent.

The best performing stock in the S&P/ASX 200 was Graincorp (ASX:GNC), rising 26 per cent to close at $9.25. Shares in Bellamy's Australia (ASX:BAL) and Bluescope Steel (ASX:BSL) followed higher.

The worst performing stock in the S&P/ASX 200 was St Barbara (ASX:SBM), dropping 7.9 per cent to close at $4.09. Shares in Metcash (ASX:MTS) and Ausdrill (ASX:ASL) followed lower.

Asian markets

Higher:Japan’s Nikkei has added 1.1 per cent, Hong Kong’s Hang Seng has added 2.5 per cent and the Shanghai Composite has gained 2.8 per cent.

Commodities and the dollar

Gold is trading at $US1,225 an ounce.
Iron ore is 0.8 per cent lower at US$65.95.
Light crude is $0.52 at $US50.93 barrel.
One Australian dollar is buying 73.64 US cents.