Interest rates kept on hold: ASX closes 0.3% lower

Market Reports

by Rachael Jones

Australian share market had a weak start this morning and continued to retreat throughout the day – closing at 0.3 per cent lower. Reserve Bank kept rates on hold. Car sales dropped in Feb by over 9 per cent compared to this time last year. Supermarket and liquor wholesaler Metcash shares did well today after yesterday's strategy update and plans for overhaul. Orocobre (ASX:ORE), one of the world's largest & lowest cost lithium chemicals producers, took an over 6 per cent dip today, Syrah Resources (ASX:SYR) and Western Areas (ASX:WSA) were also on the worst performers list today. Consumer Staples topped the best performers index today with Consumer Discretionary coming in last. At the closing bell the S&P/ASX 200 index closed 18 points lower to finish at 6199.

Futures

Dow futures are suggesting a fall of 27 points.
S&P 500 futures are eyeing a fall of 1 points.
The Nasdaq futures are eyeing a drop of 2 points.
And the ASX200 futures are eyeing a 33 point fall tomorrow morning

Local economic news

Investors were waiting anxiously to see what the Reserve Bank would do with interest rates. As expected they have been kept on hold for the 28th consecutive session at 1.5 per cent. This is despite evidence from the last six months that the global economy has been slowing. The last time there was a rate change was back in August 2016 when it was cut the historic low of 1.5 per cent.

The Federal Chamber of Automotive Industries (FCAI) reports a drop in sales of new vehicles of 9.3 per cent on the same period last year. Just over 87 thousand new vehicles were sold during the month of February 2019. Chief executive Tony Weber says given the current challenging economic conditions, including a downturn in the housing market, the automotive industry is not surprised by the slower start to the year.

Company news

The Star Entertainment Group (ASX:SGR) has noted the intention of the Queensland Government to test the market for the Gold Coast Global Tourism Hub. They are calling for Registrations of Interest (ROI) for the development. The Star Entertainment Group will consider its response as more details become available. They have previously declared that the Gold Coast is already saturated as an electronic gaming machine market. Shares in the Star Entertainment Group (ASX:SGR) are 2.6 per cent lower at $4.45.

Australia's second largest retailer Coles (ASX:COL) announced an incorporated Joint Venture with Australian Venue Co (AVC) in relation to its hotels business, Spirit Hotels. Coles will receive about $200 million in cash at completion, subject to certain conditions.

Satellite company, Sky and Space Global (ASX:SAS) has inked a trial agreement with a Nigerian mobile telecommunications provider, MTN Nigeria, to explore collaborative projects. The African company serves 52 million subscribers.

And Dairy company, Fonterra Co-operative Group (ASX:FSF) appointed Miles Hurrell as Chief Executive Officer (CEO), with immediate effect. The company is in the midst of portfolio review, re-evaluating its investments, major assets and partnerships

Best and worst performers 

The best performing sector was Consumer Staples adding 0.9 per cent while the worst performing sector was Consumer Discretionary, shedding 0.9 per cent.

The best performing stock in the S&P/ASX 200 was Metcash (ASX:MTS), rising 4.9 per cent to close at $2.80. Shares in Iress (ASX:IRE) and CYBG (ASX:CYB) followed higher.

The worst performing stock in the S&P/ASX 200 was Orocobre (ASX:ORE), dropping 6.3 per cent to close at $3.60. Shares in Syrah Resources (ASX:SYR) and Western Areas (ASX:WSA) followed lower.

Asian markets 

Japan’s Nikkei has lost 0.4 per cent, Hong Kong’s Hang Seng has lost 0.03 per cent and the Shanghai Composite has gained 0.1 per cent.

Commodities and the dollar

Gold is trading at US$1,289 an ounce.
Iron ore price lost 0.3 per cent to US$87.69
Iron ore futures are eyeing a fall of 2.2 per cent.
Light crude is $0.65 up at US$56.45 barrel.
One Australian dollar is buying 70.75 US cents.