Back into record territory on Ausdrill rally, rates cut in July: ASX 0.2% higher

Market Reports

by Jessica Amir

The Aussie share market bounced into positive territory before the close of trade, ending 0.2 per cent higher today, after spending most of the day in the red.  And in a reverse of earlier, most of the sectors closed with a profit, with the local bourse ending back in record territory.

Westpac (ASX:WBC) is now expecting rates to be cut in July instead of August. Westpac’s chief economist, Bill Evans says it comes after the bank absorbed the RBA’s “explicit signals provided in the Governor’s more recent speech”. Bill Evans says based on WBC’s experience with other central bankers, this language is direct.

Also boosting afternoon sentiment, Wall Street is eyeing a bounce back from Friday’s negative close where we saw the S&P 500 retreat from its all-time high.

At the closing bell the S&P/ASX 200 index closed 15 points higher to finish at 6,665.

Futures market

Dow futures are suggesting a rise of 64 points.
S&P 500 futures are eyeing a rise of 9 points.
The Nasdaq futures are eyeing a lift of 29 points.
And the ASX200 futures are eyeing a 6-point rise.

Company news

Navitas’ (ASX:NVT) takeover is now legally effective, with BGH Bidco A Pty Ltd set to acquire all of the shares in Navitas. After close of trade, Navitias will cease trading, with the takeover to be implemented on 5 July 2019. It comes as Navitas today, lodged Supreme Court orders approving the takeover with ASIC (Australian Securities and Investments Commission). On 12 April, the Australian Government’s Foreign Investment Review Board approved BGH's acquisition. The takeover proposal was for $2.1 billion at $5.825 per share. Shares in Navitas (ASX:NVT) last traded at $5.82. Year-on-year its shares gained 28 per cent.

Ausdrill’s (ASX:ASL) hard-rock underground miner Barminco, has been awarded a 5-year mining services contract worth $800 million in Botswana.

Citi has upgraded Domino’s Pizza Enterprises (ASX:DMP) to a buy with a price target of $44.00. It comes as the pizza chain plans to increase its European stores by 2.5 times over the next decade, which would make it the largest company it its segment.

Metcash (ASX:MTS) the owner of, IGA, Mitre 10 and Home Timber & Hardware, declared its profit went back to black, surging to a $192.8 million profit in FY19 on supermarkets sales growth. Metcash entered into a five-year supply agreement with Drakes Supermarkets in Queensland, and it expects to stop supplying Drakes Supermarkets in South Australia by 30 September 2019.

Aveo Group (ASX:AOG) has announced following a change to its reporting, it will now be “increasingly difficult for Aveo to provide future underlying EPS guidance as, unlike residential sales where the exchange of a contract is binding between the vendor and the purchaser, the sale of retirement units is not binding until settlement". Meantime, it declared its annual distribution for the year ending 30 June 2019 will be 4.5 cents per stapled security, (that’s its guidance of 40-60 per cent of underlying profit after tax.

Murray Goulburn (ASX:MGC) has settled the $42 million Endeavour River class action in the Federal Court of Australia. About $33.6 million will be funded by insurance, and after paying the remaining portion, MG intends to recover about $8.4 million from an insurer third party.

Best and worst performers of the day

The best performing sector was REITs adding 1.4 per cent while the worst performing sector was Consumer Staples, shedding 0.7 per cent.

The best performing stock in the S&P/ASX 200 was Ausdrill (ASX:ASL), rising 10.5 per cent to close at $1.74. Shares in Viva Energy Group (ASX:VEA) and Domino’s Pizza Enterprises (ASX:DMP) followed higher.

The worst performing stock in the S&P/ASX 200 was Metcash (ASX:MTS), dropping 9.8 per cent to close at $2.84. Shares in NRW Holdings (ASX:NWH) and Domain Holdings Austraila (ASX:DHG) followed lower.

Asian markets

Mixed: Japan’s Nikkei has added 0.1 per cent, Hong Kong’s Hang Seng has added 0.02 per cent and the Shanghai Composite has lost 0.01 per cent.

Commodities and the dollar

Gold is trading at US$1,406 an ounce.
Iron ore price fell 0.2 per cent to US$116.98.
Iron ore futures are pointing to a fall of 0.8 per cent.
Light crude is US$0.36 up at US$57.43 a barrel.
One Australian dollar is buying 69.59 US cents.

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