Sluggish start to week, Nickel prices & companies soar: Aus shares 0.1% lower at noon

Market Reports

by Jessica Amir

A sluggish start to the trading week, after the local market gained 1.8 per cent last week with the IT sector surging 7 per cent.

We had mixed leads from the get-go today with US stocks changing little on Friday, but the S&P500 saw a stella gain last week rising 3 per cent, its best weekly performance since June.

Nickel prices skyrocketed to five-year highs on Friday after a government official at a major producing country, Indonesia said the country would ban ore exports from December. This is boding well for Western Areas (ASX:WSA) and Independence Group (ASX:IGO). While, Gold prices fell on Friday on a slight recovery in equities markets and Treasury yields.

Turning to the chart, The S&P/ASX 200 index is 0.1 per cent or 9 points down at 6,595 points, snapping its four-day winning streak, with most of the local sectors in the red. On the futures market the SPI is 2 points higher.

Local economic news

Australian manufacturing, Performance of Manufacturing Index (Australian PMI) notched a positive start to new financial year. The reading was also better than expected, with the Australian Industry Group Australian PMI rising 1.8 points to 53.1 in August, on increasing levels of production and rising exports. The market was only expecting the reading to rise from 51.3 to 51.6. Readings below 50 points indicate contraction in activity, and above 50 indicates the strength of the market.

Broker moves

Citi has upgraded Link Group (ASX:LNK) from a neutral to a buy, also bumping up its 12-month price target from $5.45 to $6.20. However, Citi has dropped its EPS target on a significant rise in depreciation and amortisation charges, almost double what the international bank forecast. Citi says Link’s businesses still faces challenging conditions, and its major costs overruns now seem to be more contained. Its trading 1 per cent higher at $5.54 at noon. 

Company news

Western Areas (ASX:WSA) shares surged to a year high, jumping 13 per cent earlier, after its JV project with St George Mining (ASX:SGQ) reported a new discovery of high-grade nickel-copper sulphides at their Mt Alexander Project, in the north-eastern Goldfields. Western Areas has a 25 per cent stake while the smaller company, St George Mining (ASX:SGQ) has a 75 per cent stake. The new discovery is in an area that has never before been drilled, and more than 1km east of the nearest known sulphide mineralisation (at the Cathedrals Prospect). Shares in Western Areas (ASX:WSA) are trading 12.3 per cent higher at $2.79 at noon. While shares in the small cap, St George Mining (ASX:SGQ) hit a year high, a high the company last reached in March this year.

Netwealth Group (ASX:NWL) advised that Michael Heine’s entity, Heine Brothers sold down about 3 per cent of the company, after selling down 7.1 million shares at a price of $7.70 on Friday 30 August 2019. It’s the first time the Heine family and its entries have sold shares since it listed in November 2017. Following the sale, the Heine family has 60.7 per cent of the shares. Shares in Netwealth Group (ASX:NWL) are trading 1.2 per cent higher at $7.72 at noon.

Best and worst performers

The best-performing sector is S&P/ASX Materials, adding 0.3 per cent, while the worst performing sector is S&P/ASX Energy, shedding 1.2 per cent.

The best performing stock in the S&P/ASX 200 is Speedcast International Limited (ASX:SDA), rising 23.2 per cent to $096, followed by shares in Western Areas Limited (ASX:WSA) and Independence Group Nl (ASX:IGO).

The worst performing stock in the S&P/ASX 200 is Incitec Pivot Limited (ASX:IPL),dropping 5.1 per cent to $3.04, followed by shares in Pinnacle Investment Management (ASX:PNI) and Bendigo And Adelaide Bank Limited (ASX:BEN).

Asian markets

Japan’s Nikkei has slipped 0.3 per cent, Hong Kong’s Hang Seng has slipped 0.2 per cent and the Shanghai Composite has added 0.4 per cent.

Commodities and the dollar

Gold is trading at US$1,525 an ounce.
Iron ore price gained 3.9 per cent to US$84.66
Iron ore futures are pointing to a rise of 3.7 per cent.
One Australian dollar is buying 67.30 US cents.