ASX claws back, IT sector up 7% this week: Aus shares close 0.3% higher Friday, 1.8% up on week

Market Reports

by Jessica Amir

The world waits for the Fed Chair Jerome Powell to speak this evening at the yearly central banking symposium, while the local stock market ended on a high today, and 1.8 per cent up on the week.

Global bonds rose slightly this week, but are lower on month and year, which is boding well for the listed property sector. This week the local IT sector gained 7 per cent, with the Energy sector following 5.5 per cent higher (on the week). 

At the closing bell the S&P/ASX 200 index closed 21 points higher 0.3 per cent to finish at 6,523. Over the week, it closed 118 points or 1.8 per cent higher. We are now 5 per cent off the all-time high.

Futures market

Investors look for hints that Fed will cut rates in September with the market 94 per cent of the market expecting a cut (so the futures are up). The Fed cut rates by 25 basis points in July on “global developments” and “muted inflation.

Dow futures are suggesting a rise of 113 points.
S&P 500 futures are eyeing a rise of 14 points.
The Nasdaq futures are eyeing a rise 47 points.
And the ASX200 futures are eyeing a 0.3 per cent.

Company news

World leading metals and electronics recycling company, Sims Metal Management Limited (ASX:SGM) results were appreciated by the market, after its shares rose to a four week high on its revenue lifting 3.0 per cent to $6.6 billion. Its attributable profit fell 25 per cent to $152.6 million on the back of sales volumes being almost flat compared to 2018’s financial year, while its final dividend fell 37 per cent. Shares in Sims Metal Management (ASX:SGM) closed 9.4 per cent higher at $10.41.

Pharmaceutical company Mayne Pharma (ASX:MYX) shares hit a six week high today after announcing its reported gross profit rose 13 per cent in FY19, compared to FY19, while its reported net loss dived deeper into the red, falling 110 per cent to a $281 million loss, impacted by a non-cash write down. The $352 million impairment for intangible generic assets, resets the balance sheet, improving profit for future periods and is in line with the US generic peers.

Brick manufacturer Brickworks (ASX:BKW) shares rose 2.4 per cent today, as it continues its expansion into the US by snapping up a US brick manufacturer, Sioux City Brick for AUD$47 million. In terms of its FY19 results, subject to the WHSP full year result, overall FY2019 NPAT will be broadly in line with the prior year.

Boral (ASX:BLD) has inked a deal to sell its Midland Brick business for $86 million. The business says having divested its 40 per cent stake in the CSR Boral Bricks JV in 2016, the sale of Midland Brick completes its exit from bricks in Australia, for a total $215 million over the past three years.

Best and worst performers of the day

The best performing sector was REITs, adding 2.5 per cent while the worst performing sector was Health Care, shedding 0.3 per cent.

The best performing stock in the S&P/ASX 200 was Mayne Pharma Group (ASX:MYX), rising 10.5 per cent to close at $0.53. Shares in Sims Metal Management (ASX:SGM) and Viva Energy REIT (ASX:VVR) followed higher.

The worst performing stock in the S&P/ASX 200 was Costa Group Holdings (ASX:CGC) dropping 16.4 per cent to close at $3.17. Shares in Pilbara Minerals (ASX:PLS) and South32 (ASX:S32) followed lower.

Asian markets

Japan’s Nikkei has gained 0.4 per cent, Hong Kong’s Hang Seng has gained 0.5 per cent and the Shanghai Composite has gained 0.4 per cent.

Wall Street

Wall Street closed the last four trading days higher. The Dow Jones gained 1.4 per cent, the S&P500 gained 1.2 per cent and the Nasdaq gained 1.2 per cent.

Commodities and the dollar

Gold is trading at US$1,494 an ounce.
Iron ore price is trading 1.9 per cent higher at US$84.42.
Iron ore futures are pointing to a rise of 3.2 per cent.
Light crude is US$0.29 down at US$55.39 a barrel.
One Australian dollar is buying 67.59 US cents.

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