ASX slips on profit taking and private sector credit miss: Aus shares close 0.5% lower

Market Reports

by Jessica Amir

The Australian share market inked its second straight negative close, but it’s still just 1 per cent away from the new 11.5-year highs the market hit last week (24 and 26 April 2019).

Over half of the sectors closed in the red on the back of profit taking and some economic news that missed expectations.

The S&P/ASX200 index

At the closing bell the S&P/ASX 200 index closed 0.5 per cent or 34 points lower at 6,326.

From the outset we had stellar leads after the S&P 500 hit a new all-time high after rising 0.11 per cent at 2,943 on the back of about 78 per cent of company’s reporting results that beat expectations. While we also saw the tech-heavy Nasdaq hit a new all-time high after rising 0.2 per cent to 8,162.

Futures market

Dow futures are suggesting a fall of 12 points.
S&P 500 futures are eyeing a dip of 3 points.
The Nasdaq futures are eyeing a fall of 18 points.
And the ASX200 futures are eyeing a 36-point fall.

Economic news

Private sector credit grew 3.9 per cent over the year to the close of March, missing expectations of a 4.3 per cent rise, after it grew 5 per cent over the same time last year.

Company news

Leading owner, operator and manager of retirement communities, Aveo Group (ASX:AOG) saw its shares rally today to an eight week high. It comes as Aveo announced due diligence by potential takeover parties is continuing, while it says there is no certainty that an acceptable offer will eventuate for Aveo. Aveo’s Independent Board Committee says, it remains focused on “closing the value gap between Aveo’s listed securities and the underlying value of our market-leading retirement properties.” The shortlisted preferred parties have been engaged in the second stage of the process which started on 13 February 2019. Shares in Aveo Group (ASX:AOG) closed 10.4 per cent higher at $2.13.

Owner and operator of retail brands including Rebel Sport, Supercheap Auto, BCF, Super Retail Group (ASX:SUL) has reported a 4.4 per cent growth in sales over the 43 weeks to 27 April 2019, compared to the prior corresponding period. The largest sales growth came from Macpac, which saw total sales rise 17.8 per cent in the period. Year-to-date Super Retail Group (ASX:SUL) shares are trading 25 per cent higher.

Domain Holdings Australia (ASX:DHG) also had its CEO and MD present at Macquarie Australia’s Conference. Jason Pellegrino highlighted home loans, insurance and utilities connections as being ‘key development initiatives’ for business growth and competitive positioning. He says the average home loan, which is refinanced every 4 years, yields about $5,000 for the business. Whereas, the annual transaction for insurance and utilities, yields $200 and $150 respectively, while the average property, which is sold once in every 10 years, yields $180 to about $2,000.

Seven Group Holdings (ASX:SVW) has lifted its earnings guidance and now expects FY19 earnings before interest and tax (EBIT) to be 40 per cent higher than FY18’s $496.9 million. It comes as its WesTrac business has remained strong, despite the company expecting a potential fall in its second half outlook. While Seven Group’s energy business has continued to perform strongly, while the group’s Coates Hires segment continues to see weakness and has been hit by wet weather and floods.

IPOs

Pengana Private Equity Trust (ASX:PE1) started trading today. The listed investment trust investing in global private equity, floated with an issue price of $1.25, opened at $1.24 and closed at $1.24.

Best and worst performers of the day

The best performing sector was S&P/ASX 200 Health Care adding 04 per cent while the worst performing sector was S&P/ASX 200 Utilities, shedding 1.9 per cent.

The best performing stock in the S&P/ASX 200 was Aveo Group (ASX:AOG), rising 10.4 per cent to close at $2.13. Shares in Costa Group Holdings Limited (ASX:CGC) and Emeco Holdings Limited (ASX:EHL) followed higher.

The worst performing stock in the S&P/ASX 200 was Domain Holdings Australia Limited (ASX:DHG), dropping 7.5 per cent to close at $2.70. Shares in Ooh!Media Limited (ASX:OML) and Resolute Mining Limited (ASX:RSG) followed lower.

Asian markets

Japan’s Nikkei is not trading due to a national holiday, Hong Kong’s Hang Seng has lost 0.5 per cent and the Shanghai Composite has gained 0.5 per cent.

Commodities and the dollar

Gold is trading at US$1,283 an ounce.
Iron ore price rose 0.5 per cent US$94.05
Iron ore futures are pointing to a rise of 1.9 per cent.
Light crude is US$0.31 up at US$63.61 a barrel.
One Australian dollar is buying 70.38 US cents.