Weaker than expected China oil demand: Aus shares close 1.2% lower

Market Reports

by Jessica Amir

The Australian share market wiped out yesterday’s gains it’s back where it sat last Tuesday, and we last hit these levels two years ago in December.

All of our sectors closed with a loss today, Energy down the most after the oil price fell to US$49.10 earlier in the session. 

From the get-go today, we had negative US leads to follow with the Dow Jones tumbling over 500 points, marking its worst close in seven months amid fears China and Europe’s economies are slowing.

At the closing bell the S&P/ASX 200 index closed 69 points lower, or 1.2 per cent lower to finish at 5,590, that’s 12 per cent away from our 10 year high the XJO hit late August 2018.

Futures market

Dow futures are suggesting a rise of 10 points.
S&P 500 futures are eyeing a rise of 2 points.
The Nasdaq futures are eyeing lift of 13 points.
And the ASX200 futures are eyeing a 60 point rise tomorrow morning

Company news

Gold producer Northern Star Resources (ASX:NST) has seen its shares continue their three-day rally and its shares are up 38 per cent year to date. Northern Star (ASX:NST) and MACA Limited (ASX:MLD) completed their $4 million combined placement into small gold play, Echo Resources (ASX:EAR). Northern Star Resources Principal – business development, Alan Thom has been appointed as an Echo Resources non-exec director. Shares in Northern Star Resources (ASX:NST) closed 3.3 per cent higher at $8.56.

Fletcher Building (ASX:FBU) has announced the sale of the Formica Group for US$840 million. The company says the sale to Broadview Holding completes its strategy to exit non-core businesses, having already sold its roof tile business in November. The sale is subject to customary and regulatory approvals, but it’s expected to be completed by the end of FY19.

Carsales.com (ASX:CAR) has flagged a $48 million non-cash write-down for Stratton Finance Group CGU on the back of ASIC legislation changes on car financing, which came into effect in November 2018, coupled the company being hit by the tighter credit market. The estimated share of net profit from Stratton will drop to $1 million in FY19 (from $2.0 million in FY18).

Caltex Australia (ASX:CTX), shares fell 5.5 per cent to $25.57 after it announced its 2018 historic cost profit after tax outlook is between $530 million and $550 million, a drop of 13 per cent compared to the same time last year. Caltex expects fuels and infrastructure earnings (EBIT) will be in a range of $560 to $580 million, a fall of 14 per cent from on the back of lower refiner margins.

IPOs

Biopharmaceutical research Exopharm Limited (ASX:EX1) started trading today. It with an issue price of $0.20, opened at $0.42 and it closed at $0.51. 

Best and worst performers of the day

The best performing sector was Telco Services closing flat, but in the red. The worst performing sector is Energy, shedding 2.7 per cent after the oil price dropped 2.6 per cent on the back of weaker Chinese demand, from the world’s largest oil importer.

The best performing stock in the S&P/ASX 200 was CSR (ASX:CSR), rising 4.8 per cent to close at $2.83. Shares in TPG Telecom (ASX:TPM) and Abacus Property Group (ASX:ABP) followed higher.

The worst performing stock in the S&P/ASX 200 was Mayne Pharma Group Limited (ASX:MYX), dropping 6.5 per cent to close at $0.87. Shares in Worleyparsons Limited (ASX:WOR) and Smartgroup Corporation Ltd (ASX:SIQ) followed lower.

Asian markets

Lower: Japan’s Nikkei has lost 1.7 per cent, Hong Kong’s Hang Seng has lost 0.9 per cent and the Shanghai Composite has lost 1.1 per cent.

Commodities and the dollar

Gold is trading at US$1,248 an ounce.
Iron ore price fell 0.4 per cent to US$70.47 and its futures are pointing to a fall of 0.2 per cent.
Light crude is $2.00 lower at $US49.47 barrel.
One Australian dollar is buying 71.91 US cents.