Aussie share follow global markets lower on Trump threating China: Aus shares close 0.5% lower

Market Reports

by Jessica Amir

The Australian share market wiped out yesterday’s 0.3 per cent gain, falling 0.5 per cent, largely on the back of global markets paring back from their new record highs after Donald Trump said China was ripping off the USA and that the US would ‘win’ the trade negotiation and that things for China will be 'much tougher' than what they are negotiating now.

Most of the local sectors closed in the red but the Australian share market holds onto the new fresh highs, while the Aussie dollar is trading at the high 68 US cents level.

Tonight, in the US, the FOMC meets, and markets are pricing in a rate cut of 25 basis points (0.25 per cent). Some economists are expecting a 50-basis point cut (0.5 per cent). Markets won’t react positively if something else happens or if the minutes retract from cutting the rate by 100 basis points over the next 12 months.

At the closing bell the S&P/ASX 200 index closed 0.5 per cent or 33 points at 6,813 points. 

Futures market

Dow futures are suggesting a/rise of 79 points.
S&P 500 futures are eyeing a lift of 6 points.
The Nasdaq futures are eyeing a lift of 30 points.
And the ASX200 futures are eyeing a 0.5 per cent or 31 point rise.

Economic news

Inflation rose more than expected on a quarterly basis, rising 0.6 per cent in the June quarter, versus the consensus expectation of a 0.5 per cent rise in the consumer price index (CPI). The prior reading was flat in the March quarter 2019, according to the ABS.

As a result, on a yearly basis, CPI rose more than expected, up 1.6 per cent, beating the consensus 1.5 per cent lift year-on-year expected. The prior reading was a 1.3 per cent rise.

Company news

CYBG (ASX:CYB) released its June quarter results to the market, after the market close yesterday. It’s results for the nine months to 30 June 2019 were in line with the board’s expectations and the company has made good progress in integrating Virgin Money after it officially purchased the business in October 2018. Macquarie has the stock, CYB, as outperform despite CYB mentioning that UK conditions are not expected to improve soon. Macquarie says the stock CYB offers fundamental value, but it cut its earnings forecasts from $5.30 to $4.10, factoring in Brexit risks. Shares in CYBG (ASX:CYB) closed 13.4 per cent lower at $3.10.Year-to-date its shares are 6.9 per cent lower.

ISignthis (ASX:ISX) has appointed Elizabeth Warrell as its group chief financial officer. She has 20 years banking and financial services experience in Australia and internationally, including her current role at NAB (ASX:NAB) as the general manager finance, consumer banking. Year-to-date its shares are 422 per cent higher.

Lab testing and certification company ALS (ASX:ALQ) reported its underlying NPAT (from continuing operations) rose 27.3 per cent in 2019 compared to the pcp. Revenue also rose up 15.1 per cent to $1.66 billion. Year-to-date its shares are 6.5 per cent higher.

Adelaide Brighton Limited (ASX:ABC) has revised its earnings guidance for 2019, taking underlying net profit after tax (excluding property) for the full year to 31 December 2019 to between $120-130 million. The weight came from residential and civil construction markets continuing to slow, competitive pressures in QLD and SA, the cost of raw material rising and the cancellations of import orders. A non-cash impairment of $100 million is expected for the six months to 30 June 2019 (5 per cent of Adelaide Brighton’s assets). Year-to-date its shares are 17 per cent lower.

Best and worst performers of the day

The best performing sector was S&P/ASX Energy adding 0.7 per cent while the worst performing sector was S&P/ASX Utilities shedding 1.1 per cent, after (after AGL was was downgraded).  

The best performing stock in the S&P/ASX 200 was IPH (ASX:IPH), rising 4.6 per cent to close at $8.34. Shares in St Barbara Limited (ASX:SBM) and Orica (ASX:ORI) followed higher.

The worst performing stock in the S&P/ASX 200 was Adelaide Brighton Limited (ASX:ABC), dropping 18.1 per cent to close at $3.54. Shares in CYBG (ASX:CYB) and Boral (ASX:BLD) followed lower.

Asian markets

Japan’s Nikkei has lost 0.9 per cent, Hong Kong’s Hang Seng has shed 1.3 per cent and the Shanghai Composite has lost 0.4 per cent.

Commodities and the dollar

Gold is trading at US$1,432 an ounce.
Iron ore price rose 1.4 per cent to US$119.61
Iron ore futures are pointing to a rise of 1.3 per cent.
Light crude is US$1.47 up at US$58.34 a barrel.
One Australian dollar is buying 68.96 US cents.


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