The Australian share market started the trading week in the black, rising 0.8 per cent in the first two hours of trade and losing a bit of momentum in the afternoon session as traders and investors absorbed a mixed suite of economic data.
Over half of the sectors finished with a profit with Staples rising the most, with stocks like Bega Cheese (ASX:BGA) rising over 6 per cent, Bellamy's (ASX:BAL) gaining over 3 per cent, Treasury Wines (ASX:TWE) adding 3 per cent and Woolworths (ASX:WOW) rising over 2 per cent.
At the closing bell the S&P/ASX 200 index closed 0.6 per cent or 36 points higher at 6,217 points.
From the outset, we had positive leads, with the Australian dollar rising near a five day high, to 71.14 US and Wall Street closing off its week at a high, with the top 500 stocks (S&P 500) notching its best start to the year since 1998.
Dow futures are suggesting a gain of 160 points.
S&P 500 futures are eyeing a rise of 19 points.
The Nasdaq futures are eyeing a gain of 77 points.
And the ASX200 futures are eyeing a 30 point rise tomorrow morning
Local economic news
Australia’s manufacturing industry slowed in March, falling 3 points to a reading of 51.1, indicating a slower, but still buoyant level of expansion. The result also missed expectations the sector would slightly dip to a reading of 53.5 in March.
Financial services analysis firm, CoreLogic reported that Australia’s Housing downturn lost some steam with the CoreLogic National Home Value Index falling 0.6 per cent In March, the smallest drop since October last year when values fell 0.5 per cent.
One of Australia’s leading real estate groups, Dexus (ASX:DXS) has settled on its purchase of the remaining 50 per cent stake in the MLC centre for $800 million. The GPT Group (ASX:GPT) sold the 50 per cent stake at a 3 per cent premium to GPT’s 31 December 2018 book value. Shares in Dexus (ASX:DXS) closed 0.6 per cent lower at $12.66.
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 buyback, 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 W 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.
Infant formula maker Bubs (ASX:BUB) has announced plans to buy one of Australia’s 15 canning facility, Australia Deloraine Dairy, which has the approval to export into China. Bubs will pay an initial $25 million in cash and $10 million in Bubs shares for the Melbourne-based company, with further payments of up to $15 million if targets are met. The company also partnered with private equity firm, C2 Capital to raise $31.4 million at a $0.65 per share.
CIMIC Group’s (ASX:CIM) CPB Contractors have won a NZ$221 million contract in New Zealand for the Christchurch Metro Sports Facility, the largest aquatic and indoor recreation venue in the country. In Australia, the company was also awarded a NSW Government contract to upgrade The Northern Road between Eaton Road and Littlefields Road, an important component of the Western Sydney Infrastructure Plan, which will deliver about $119 million in revenue to the company.
Best and worst performers of the day
The best performing sector was S&P/ASX 200 Consumer Staples adding 1.9 per cent, followed by S&P/ASX 200 Materials, S&P/ASX 200 Health Care, S&P/ASX 200 Financials, S&P/ASX 200 Consumer Discretionary and S&P/ASX 200 Energy. While the worst performing sector was S&P/ASX 200 A-REIT shedding 0.7 per cent, neck of neck with S&P/ASX 200 Utilities, followed by Telcos and S&P/ASX 200 Industrials.
The best performing stock in the S&P/ASX 200 was Eclipx Group (ASX:ECX), rising 16.4 per cent to close at $0.74. Shares in Afterpay Touch Group Limited (ASX:APT) and Bega Cheese Limited (ASX:BGA) followed higher.
The worst performing stock in the S&P/ASX 200 was Pilbara Minerals Limited (ASX:PLS), dropping 6.3 per cent to close at $0.74. Shares in Syrah Resources Limited (ASX:SYR) and Regis Resources Limited (ASX:RRL) followed lower.
Japan’s Nikkei has added 1.5 per cent, Hong Kong’s Hang Seng has added 1.7 per cent and the Shanghai Composite has gained 2.3 per cent.
Commodities and the dollar
Gold is trading at US$1,294 an ounce.
Iron ore price rose 2.5 per cent to US$86.81
Iron ore futures are eyeing a rise of 3 per cent.
Light crude is $0.84 up at US$60.14 barrel.
One Australian dollar is buying 71.24 US cents.