The Australian share market kicked off the 2020 financial year higher, rising at the open on the back of solid Wall Street leads as Trump and Xi agreed to not impose more tariffs. We saw S&P 500 make its best first half in two decades and the Dow Jones made its biggest monthly gain since 1938.
Locally, most of the sectors on the ASX are trading higher with four sectors seeing gains over 1 per cent.
Financials are trading 0.4 per cent higher with small gains in the big four banks, while CBA (ASX:CBA) is in negative territory as the new Banking Code of Practice comes into affect today, with banks no longer to offer unsolicited credit card limit increases and charge commissions on Lenders Mortgage Insurance or sell insurance with credit cards and personal loans at point of sale. Under the code banks must offer low-fee or no-fee accounts to low income customers, amongst other things.
The S&P/ASX 200 index is 35 points or 0.5 per cent higher at 6,654 at noon. On the futures market the SPI is 34 points higher.
Local economic news
Australia’s manufacturing saw its first mild contraction and the lowest result since August 2016, in June 2019. The Australian Industry Group’s Performance of Manufacturing Index (Australian PMI) fell 3.3 points to 49.4 in June. It’s the weakest condition seen in almost three years. The sector was dragged it into negative territory on the back of the housing construction downturn, a slowdown in engineering construction, the drought and slower income growth. (Readings below 50 points indicate contraction in activity).
Citi has maintained its buy in Rio Tinto (ASX:RIO) with a 12-month target of $114, Citi says in light in of Rio Tinto’s (ASX:RIO) recent copper-gold discovery in Western Australia after drilling down into Winu, in the next six to-12 months Citi expects Rio to view this as a greenfield project of Rio-scale. Further drill results are expected in the September quarter. Rio is trading at 0.8 per cent higher at $104.55.
As part of The Commonwealth Bank of Australia (ASX:CBA) revival plan, its Remuneration Committee has been renamed the People & Remuneration Committee, as of today, 1 July 2019. It will also have an extra focus on people and remuneration strategies, talent management, diversity and inclusion and organisational culture. Paul O’Malley, former CEO of BlueScope Steel (ASX:BSL) will become the chair from 1 January 2020, after Sir David Higgin’s retires 31 December 2019. Shares in Commonwealth Bank of Australia (ASX:CBA are trading 0.8 per cent lower at $82.16 at noon.
Unibail-Rodamco-Westfield (ASX:URW) group chief development officer of Unibail-Rodamco-Westfield SE, Mr Olivier Bossard and a member of the supervisory board Mr Roderick Munsters, purchased and sold a number of shares in the company, with Roderick buying €37,830 of stock and Olivier buying and selling about €1.8 million of stock. Shares in Unibail-Rodamco-Westfield ASX:URW) are trading 4.8 per cent higher at $10.76 at noon.
Best and worst performers
The best-performing sector is S&P/ASX Info Tech, adding 1.8 per cent, while the worst performing sector is S&P/ASX Consumer Discretionary, shedding 0.4 per cent.
The best performing stock in the S&P/ASX 200 is Galaxy Resources Limited (ASX:GXY), rising 5.9 per cent to $1.30, followed by shares in Reliance Worldwide Corporation Limited (ASX:RWC) and Unibail-Rodamco-Westfield (ASX:URW).
The worst performing stock in the S&P/ASX 200 is Emeco Holdings Limited (ASX:EHL), dropping 4.4 per cent to $1.98, followed by shares in Northern Star Resources (ASX:NST) and Regis Resources Limited (ASX:RRL).
Japan’s Nikkei has added 1.5 per cent, Hong Kong’s Hang Seng is not trading and the Shanghai Composite has added 1.4 per cent.
Commodities and the dollar
Gold is trading at US$1,394 an ounce.
Iron ore price rose 0.4 per cent to US$118.47
Iron ore futures are pointing to a rise of 2.8 per cent.
One Australian dollar is buying 70.04 US cents.