The Australian share market started the trading week on solid footing, rising 0.9 per cent in the first two hours of trade. From the outset we had positive leads, with the Australian dollar rising to 71.14 US cents and Wall Street closing off its week at a high with the top 500 stocks (S&P 500) notching its best start to year since 1998. Consumer Staples is the best performing sector so far today is Telco services is at the bottom. Iron ore gained 2.5 per cent, while oil and gold are also rallying. The S&P/ASX 200 index is 43 points up 0.7 per cent higher at 6,223. On the futures market the SPI is 43 points higher.
Local economic news
The Australian Industry Group Australian Performance of Manufacturing Index fell 4.8 points to 58.3 points in April, indicating a slower – but still buoyant - rate of expansion in April, after reaching a record high in March (seasonally adjusted).
Property analysts CoreLogic report that Australia house prices are continuing to fall but at a slightly slower pace than in the last four months. The median price for dwellings across Australia fell 0.6 per cent in March. In October 2018 when values fell 0.5 per cent.
NAB also released their business survey March. Business conditions rose by 3 points to +7 index points. Profitability is now +5 and trading at +12 are now just above average, while the employment index +7 is well above average. Confidence fell 2 points in the month to 0 index points, continuing its below average run.
Woolworths (ASX:WOW) has announced it’s completed the sale of its petrol business, and will likely see an after tax gain of $1.1 billion in FY19. It will return the proceeds to shareholders via a $1.7 billion off-market buy back, with the offer opening on 16 April. Woolies also announced it will close about 30 BIG W stores (16 per cent of its store network) over the next three years and close two distribution centres at the end of their leases, resulting in total exit costs of $270 million. Its review of the BIG W network also found $100 million in non-cash impairments, reflecting a more conservative margin, taking its total pre-tax charges to $370 million. BIG sales have also been weaker than expected in the third quarter of FY19, which will result in an expected loss of $80-$100 million in FY19 (before interest and tax), a likely slight improvement on BIG W’s loss of $110 million in FY18. Shares in Woolworths (ASX:WOW) are trading 2.1 per cent higher at $31.03 at noon.
Best and worst performers
The best-performing sector is Consumer Staples, adding 1.8 per cent, while the worst performing sector is Telco services, shedding 0.3 per cent.
The best performing stock in the S&P/ASX 200 is Eclipx Group (ASX:ECX), rising 10.9 per cent to $0.71, followed by shares in Afterpay Touch Group (ASX:APT) and HUB24 (ASX:HUB).
The worst performing stock in the S&P/ASX 200 is Syrah Resources (ASX:SYR), dropping 4.7 per cent to $1.02, followed by shares in Pilbara Minerals (ASX:PLS) and Regis Resources (ASX:RRL).
Commodities and the dollar
Gold is trading at US$1,292 an ounce.
Iron ore price rose 2.5 per cent to US$86.81
Iron ore futures are pointing to a rise of 2.01 per cent.
One Australian dollar is buying 71.19 US cents.