Aged care sector slides: ASX200 gains 1.8% over week

Market Reports

by Katrina Bullock

The ASX200 continues its rise, closing 0.5 per cent higher today. This marks the fourth day of gains for the local bourse. All of the sectors closed higher with our smallest sector, Tech, leading the charge. Today marked the first day of the Royal Commission into the aged care sector and aged care stocks felt the heat with Regis Healthcare (ASX:REG), Estia Health (ASX:EHE) and Japara Healthcare (ASX:JHC) all taking a hit. At the closing bell the ASX 200 index closed 3 points higher to finish at 5,880.

Over the week, the market has gained 105 points or 1.8 per cent,

Broker moves

Citi has upgraded financial services giant IOOF Holdings (ASX:IFL) 12 month price target from $4.50 to $5.70. This comes despite a cut in earnings per share with Citi warning that there is still 'significant uncertainty' plaguing the company.

Michael Hill (ASX:MHJ) has been upgraded from a sell to a hold by Citi, with the multinational bank giving a 12 month price target of $0.63 down from its prior target of $0.65. This follows a strong sales performance over Christmas and a rise of 1.3 per cent in November and December.

Futures market

Dow futures are suggesting a rise of 81 points.
S&P 500 futures are eyeing a rise of 7 points.
The Nasdaq futures are eyeing a lift of 18 points.
And the ASX200 futures are eyeing a life of 32 points on Monday morning. 

Economic news

ABS data shows that a steady number of short term tourists entered Australian shores last November compared to the previous month. This follows monthly increases of 0.2% in both September 2018 and October 2018. The ABS is projecting an increase of 3.4% compared to November's figures.

Company news

Engineering major WorleyParsons (ASX:WOR) has been awarded a contract for the Pipestone Processing Facility in Alberta Canada by Encana Corporation. Under the contract WorleyParsons will provide engineering, procurement, fabrication and construction services. This comes after WorleyParsons wrapped up a number of projects for Encasa including the the fabrication and construction of the Tower Gas Plant, the Saturn Gas Plant and the North Central Liquids Hub. Shares in WorleyParsons (ASX:WOR) closed 0.1 per cent lower at $13.59.

Fintech company Afterpay Touch Group (ASX:APT) has reported that last December was their largest month on record. A comparison of the first half of the 2019 financial year compared to the first half of the 2018 financial year shows a whopping 240 per cent increase in underlying sales.

Paper distributor Spicers (ASX:SRS) may be taken over by Japan's Kokusai Pulp and Paper. Spicers has entered into a scheme of arrangement for around $148 million. Spicers' directors unanimously recommend that shareholders vote in favour of the all-cash offer which values the business at 7 cents a share.

Renewable energy company Tilt Renewables’ (ASX:TLT) was up around 12 per cent for the fourth quarter of 2018 compared to the prior corresponding period. The company attributes the result to higher wind conditions and favourable production at the Salt Creek Wind Farm.

The news is not so good for Rio Tinto (ASX:RIO). Their fourth quarter production results show iron ore shipments dropped by 3 per cent to 87.4 million tonnes. The shipments were impacted by the fire at their Cape Lambert port.

Best and worst performers of the day

The best performing sector was Consumer Staples adding 0.7 per cent while the worst performing sector was REITS which still managed to add 0.03 per cent.

The best performing stock in the S&P/ASX 200 was Afterpay Touch Group (ASX:APT), rising 13 per cent to close at $16.10. Shares in Sandfire Resources (ASX:SFR) and Credit Corp Group (ASX:CCP) followed higher.

The worst performing stock in the S&P/ASX 200 was Steadfast Group (ASX:SDF), dropping 5.3 per cent to close at $2.69. Shares in Estia Health (ASX:EHE) and Sydney Airport (ASX:SYD) followed lower.

Asian markets

Higher: Japan’s Nikkei has added 1.3 per cent, Hong Kong’s Hang Seng has added 4.7 per cent and the Shanghai Composite has gained 0.9 per cent.

Wall Street

Wrapped up our four trading days this week higher: The Dow Jones added 1.5 per cent, The S&P 500 added 1.5 per cent and the tech heavy Nasdaq gained 1.6 per cent.

Commodities and the dollar

Gold is trading at US$1,292 an ounce.
Iron ore price rose 0.7 per cent to US$74.31. Its futures are pointing to a rise of 2.5 per cent.
Light crude is 13 cents lower at US$52.48 barrel.
One Australian dollar is buying 71.92 US cents.