Selling mounts ahead of Fed Budget, but ASX touches record territory: Aus shares close 0.4% higher

Market Reports

by Jessica Amir

The Australian share market bounced 0.4 per cent higher today and rose for the sixth straight trading session. It was as high as 6,271 points earlier, however selling mounted in the afternoon with only over half of the sectors remaining in the black ahead of the Federal Budget being handed down this evening.

At the closing bell the S&P/ASX 200 index closed 25 points higher at 6,242.

From the outset we had stellar Wall Street leads after the Dow Jones closed above 26,000 for the first time since 26 February after it rose 1.3 per cent, while the S&P added 1.2 per cent and the tech-heavy Nasdaq rose 1.3 per cent. It comes as US manufacturing activity expanded, rebounding from its lowest level from late 2016, coupled with better than expected China manufacturing data.

Futures

Dow futures are suggesting a fall of 33 points.
S&P 500 futures are eyeing a fall of 4 points.
The Nasdaq futures are eyeing a slip of 11 points.
And the ASX200 futures are eyeing a 26 point rise tomorrow morning

Local economic news

The RBA kept interest rates on hold at 1.5 per cent for the 28th consecutive month today. NAB and UBS expect there will be two rate cuts later this year.

Housing approvals rose 19.1 per cent in February (in seasonally adjusted terms), beating consensus the rate would fall 1 per cent in the month. It comes as large approvals were seen in Victoria (37.3 per cent) and New South Wales (25.2 per cent). Private dwellings excluding houses rose 64.6 per cent, while private houses fell by 3.6 per cent.

Company news

Rio Tinto (ASX:RIO) shares hit a 52 week high yesterday rising over 33 per cent year on year. Meantime Citi issued an alert on the company, maintaining its buy position with a 12-month price target of $108. Post Vale’s Brumadinho dam tragedy Rio’s share price has gone up by about 24 per cent, after Vale estimated 50-70 mega tones of iron ore production losses in CY19. Nevertheless, Citi has reduced shipment expectations for Rio’s iron ore from 347.5 megatonnes to 340 megatonnes and expects a 1.2 per cent drop in CY19 EPS. Shares in Rio Tinto (ASX:RIO) closed 1.1 per cent lower at $98.43.

Fortescue Metals (ASX:FMG) Iron Bridge Magnetite Project has been approved for the development of Stage 2. The JV project with Formosa Steel is located 145 kilometres south of Port Hedland and will deliver 22 megatonnes per annum of iron ore magnetite concentrate by mid-2022. The total capital costs are US$2.6 billion, with each party to contribute costs based on their equity share in the project, with FMG Iron Bridge owning 69 per cent and Formosa having a 31 per cent stake. FMG’s CEO says the Iron Bridget Project holds Australia’s largest JORC compliant magnetite resource, supporting a long mine life. Its shares have gained 80 per cent year on year.

The former CEO of Commonwealth Bank (ASX:CBA) Ian Narev has been hired by job-seeking company Seek (ASX:SEK) as its group chief operating officer and as the CEO of Asia Pacific and Americas. Ian will work closely with the group CEO and co-founder Andrew Basset on Seek’s strategy and operations. Ian will start the dual role as COO and CEO of AP&A on 29 April 2019.

Santos’ (ASX:STO) co-owned Papua New Guinea LNG project has inked a sales agreement with Unipec Singapore, which takes its total contracted volumes to 7.9 million tonnes per annum. Santos has a 13.5 per cent interest in PNG LNG, while Oil Search (ASX:OSH) has a 29 per cent stake in the project.

Best and worst performers of the day

The best performing sector was S&P/ASX 200 Consumer Discretionary adding 1.1 per cent, followed by S&P/ASX 200 Health Care, S&P/ASX 200 Energy, S&P/ASX 200 Industrials, S&P/ASX 200 Financials and Staples while the worst performing sectors were S&P/ASX 200 A-REITs, and Telcos shedding 0.3 per cent, following by S&P/ASX 200 Utilities that saw minor losses.

The best performing stock in the S&P/ASX 200 was Syrah Resources (ASX:SYR), rising 8.9 per cent to close at $1.10. Shares in Eclipx Group (ASX:ECX) and Orocobre (ASX:ORE) followed higher.

The worst performing stock in the S&P/ASX 200 was Charter Hall Retail Reit (ASX:CQR), dropping 3 per cent to close at $4.51 after completing a $150 million capital raise. Shares in Adelaide Brighton (ASX:ABC) followed lower, along with Incitec Pivot (ASX:IPL) after it announced plans to close a phosphate factory in Victoria at the cost of $13 million.

Asian markets

Japan’s Nikkei has added 0.1 per cent, Hong Kong’s Hang Seng has added 0.2 per cent and the Shanghai Composite has gained0 .5 per cent.

Commodities and the dollar

Gold is trading at US$1,287 an ounce.
Iron ore price rose 2.2 per cent to US$88.69
Iron ore futures are pointing to a rise of 2.8 per cent.
Light crude is $1.63 up at US$61.77 barrel.
One Australian dollar is buying 70.81 US cents.

Jessica Amir

Finance News Network
Jessica joined FNN in January 2017 after having worked in financial advising for seven years and in TV journalism for seven years, specialising in finance, equities and analysis. She has interviewed former Prime Ministers of Australia, Tony Abbott, Julia Gillard and Kevin Rudd and ex Treasurer Jo Hockey. Jessica has worked as a journalist with Sky News Business, ABC 1, ABC's The Business, ABC24 and has also been a regional Channel 7 and 9 TV reporter with Prime7 and Win News.