Consumer confidence beats mark, wages rise less than expected: Aus shares close 0.7% higher

Market Reports

by Jessica Amir

The Australia share market erased most of yesterday’s losses after it rose 0.7 per cent today with all sectors closing in the black and four sectors seeing gains of over 1 per cent, clawing back from the 0.9 per cent slip yesterday. 

We had positive sentiment from the outset as Wall Street also rebounded, with the Dow Jones claiming its best trading day in a month.

But not enough to recoup the ground lost on Monday, when the US index tumbled to January lows on news China planned to raise tariffs on $60 billion worth of US imports from 1 June, targeting goods from TV cameras to tequila, as well as some agricultural products.

And just to recap, that China move came on the back of Donald Trump announcing last week that the US would hike Chinese import tariffs from 10 per cent to 25 per cent. 

At the closing bell the S&P/ASX 200 index closed 44 points higher to finish at 6,284 points. 

Futures market

Dow futures are suggesting a rise of 44 points.
S&P 500 futures are eyeing a rise of 6 points.
The Nasdaq futures are eyeing a lift of 27 points.
And the ASX200 futures are eyeing a 59 point rise.

Economic news

The consumer confidence reading for May came in better than forecast. The Westpac-Melbourne Institute Index of Consumer Sentiment rose 0.6 per cent to 101.3 in May, beating expectations the index would fall from its prior reading of 100.7 in April, to 100.4.

And wages rose 0.5 per cent, in the March quarter of 2019, slighting missing consensus of a 0.6 per cent rise. While over the year, the Wage Price Index rose 2.3 per cent according to the ABS, and this was in line with consensus.

Company news

AHG’s (ASX:AHG) board has unanimously recommended shareholders accept the fourth revised takeover offer from A.P. Eagers (ASX:APE) for 1 APE share for every 3.6 AHG shares. The revised bid also states shareholders should accept the offer once A.P. Eagers waives the no material adverse change bid condition. It comes just a day after AHG downgraded its FY19 NPAT guidance to be $50 million, down from its operating NPAT guidance of $52 - $56 million provided in February 2019, with the drop on the back of weaker than expected trade. Shares in Automotive Holdings Group (ASX:AHG) closed 0.4 per cent lower at $2.33.

Agribusiness Webster (ASX:WBA) has snapped up Australian Rainforest Honey, an Apiary business in NSW for $5.23 million. The honey company owns over 5,000 hives and produces pure and organic honey. It also has extensive bee permits to State forests in NSW and Victoria allowing it to strategically place the hives for 'optimum honey production'. The acquisition will be funded from Webster’s existing debt facilities. Shares in Webster (ASX:WBA) closed 0.7 per cent lower at $1.52.

Gold producer and explorer St Barbara (ASX:SBM) has agreed to buy Canadian Atlantic Gold Corporation, which owns and operates Moose River Consolidated in Nova Scotia, Canada. SBM also launched a $490 million non-renounceable entitlement offer, to partial fund the purchase.

Coca-Cola Amatil (ASX:CCL) held its AGM today, advising it’s reversed the decline in beverage sales in NSW. The business has hired about 100 new sales staff to liaise with customers and CCL seen a 2 per cent rise in the year to date, after falling 11 per cent in the year earlier period. Coca-Cola volumes in Australia grew in the second half of 2018, driven by Coca-Cola No Sugar.

Property business, Goodman Group (ASX:GMG) has announced its assets under management hit $44.1 billion, with $3.7 billion of development work in progress. It also reaffirmed its forecasted FY19 operating earnings per security growth of 9.5 per cent on FY18.

Best and worst performers of the day

The best performing sector was Energy adding 1.6 per cent while the sector with the fewest gains was REITs, adding 0.1 per cent.

The best performing stock in the S&P/ASX 200 was Eclipx Group (ASX:ECX), rising 11.7 per cent to close at $1.01. Shares in Syrah Resources (ASX:SYR) and Altium (ASX:ALU) followed higher.

The worst performing stock in the S&P/ASX 200 was Regis Resources (ASX:RRL), dropping 2.1 per cent to close at $4.62. Shares in Mayne Pharma Group (ASX:MYX) and Viva Energy Group (ASX:VEA) followed lower.

Asian markets

Japan’s Nikkei has added 0.6 per cent, Hong Kong’s Hang Seng has added 1 per cent and the Shanghai Composite has gained 1.9 per cent.

Commodities and the dollar

Gold is trading at US$1,295 an ounce.
Iron ore price fell 1.8 per cent to US$94.34.
Iron ore futures are pointing to a rise of 0.3 per cent.
Light crude is US$0.32 up at US$61.53 a barrel.
One Australian dollar is buying 69.30 US cents.


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