ASX shakes off negative start, Aus unemployment rate holds: Aus shares 0.3% higher

Market Reports

by Jessica Amir

The Australian share market appears to be eyeing its second day of closing in the red on the back of reporting reason results weighing on the market (as at Midday). It comes despite investors absorbing positive US leads from the outset, after the Federal Reserve released in its board minutes.

However, after Midday the ASX200 started to claw back up, snapping its two day red streak. 

Over half of the market is in negative territory, with Materials weighing the most, followed by the small tech sector and Energy, despite US crude oil price rising to a new 2019 high.

At noon the S&P/ASX 200 index was 0.2 per cent or 12 points lower at 6,085. On the futures market the SPI is 21 points lower.

Local economic news

Australia’s unemployment rate remained steady as expected, at 5.0 per cent (in seasonally adjusted terms) in January 2019. It comes despite the RBA hinting it would like the unemployment rate to drop.

Meantime, the average weekly earnings for full-time Australians came in at $1,604.90 (trend), according to new Australian Bureau of Statistics (ABS) figures released today, for November 2018.

This is a rise of 1.2 per cent over the last six months and an annual rise of 2.4 per cent.

Broker calls

Wesfarmers (ASX:WES) is one of today’s top performing companies on the ASX, after it releasing its first half 2019 results with a lift in NPAT, group revenues and normalised EBIT. Despite that, UBS says the results 'were messy' compared to their expectations. UBS says future earnings will be lower quality and it has the conglomerate (ASX:WES) as a hold/neutral stock, with a 12-month price target of $30.75. This year, its shares are 7 per cent higher. Year-on-year its shares are 14 per cent higher.

Company news

Nine Entertainment Co Holdings Limited (ASX:NEC) reported its net profit after tax fell slightly (1 per cent) to $171.6 million in the half year to 31 December 2018. That was better than Citi’s expected NPAT of $117 million. Its revenue and group earnings (EBITDA) also fell over the period, with flat contributions from Domain, amid the housing market slow down. Looking at the broader result for the full 2019 financial year, Nine expects EBITDA growth of at least 10 per cent compared to the same time last year, and for that momentum to continue in FY20, thanks to its bolstered position on the back of merging with Fairfax. Shares in Nine Entertainment Co Holdings Limited (ASX:NEC) are trading 6.1 per cent higher at $1.55 at noon. This year its shares are 13 per cent higher. Year-on-year its shares have fallen 7 per cent.

Flight Centre Travel Group (ASX:FLT) announced its net profit after fell 17.1 per cent in the half year to December 2018 to $84.8 million. It also noted its full 2019 financial year is now tracking towards the bottom of the range and the business is closely monitoring its Australian leisure results, amid ongoing earnings and market volatility. Shares in Flight Centre Travel Group (ASX:FLT) are trading 4.7 per cent higher at $45.08 at noon. This year its shares are 0.5 per cent higher. Year-on-year its shares have fallen 13 per cent.

Best and worst performers

The best performing sector is Consumer Discretionary adding 2.4 per cent, while the worst performing sector is Materials, shedding 1.2 per cent.

The best performing stock in the S&P/ASX 200 is Webjet (ASX:WEB), rising 31.1 per cent to $14.90, followed by shares in Nine Entertainment Co Holdings (ASX:NEC) and Fisher & Paykel Healthcare Corporation (ASX:FPH) are following.

The worst performing stock in the S&P/ASX 200 is Mineral Resources (ASX:MIN), dropping 9.4 per cent to $16.09, followed by shares in St Barbara (ASX:SBM) and Evolution Mining (ASX:EVN).

Commodities and the dollar

Gold is trading at $US1,340 an ounce.
Iron ore price fell 1.4 per cent to US$88.00
Iron ore futures are pointing to a rise of 0.4 per cent.
One Australian dollar is buying 72.00 US cents.