Nickel miners surge on Indo export bank: Aus shares snap 4-day win streak, lose 0.4%

Market Reports

by Jessica Amir

The first day of red and a slight loss of 0.4 per cent for the Aussie market after gaining for the four-last sessions. We had mixed leads from the get-go today with US stocks changing little on Friday, but the S&P500 gained 3 per cent last week, its best weekly gains 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.

At the closing bell the S&P/ASX 200 index closed 0.4 per cent or 25 points lower to finish at 6,579. The local bourse gained 1.8 per cent last week with the IT sector surged 7 per cent.

Futures market

Dow futures are suggesting a fall of 88 points.
S&P 500 futures are eyeing a dip of 13 points.
The Nasdaq futures are eyeing a fall of 51 points.
And the ASX200 futures are eyeing a 0.4 per cent or 25 point fall.

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.

Company news

Fertiliser company, Incitec Pivot Limited’s (ASX:IPL) announced that it’s kicking off a strategic review of its Fertilisers Asia Pacific business segment (Incitec Pivot Fertilisers). It comes as the company dropped its FY19 guidance from $370 million to $415 million in earnings before interest and tax (EBIT) to between $321 million and $366 million, on lower than forecast ammonia production in Louisiana (Waggaman) and lower fertilisers earnings on drought impacts in New South Wales and Queensland. Shares in Company Incitec Pivot Limited’s (ASX:IPL) closed 4.4 per cent lower at $3.07.

Western Areas (ASX:WSA) shares surged to a year-high, jumping 14 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.

Telstra (ASX:TLS) shares slipped 2.2 per cent after it updated its FY20 guidance on the back of NBN Co’s Corporate Plan 2020 released last Friday. NBN Co’s updated plan indicates a drop in the number of premises forecast to be connected in FY20 from 2 million to 1.5 million.

Australian Unity Office Fund (ASX:AOF) inked a deal to be taken over by Abacus Property Group (ASX:ABP) and Charter Hall Group (ASX:CHC) (Consortium) for $495 million. The consortium bumped up their joint bid last month and will acquire all of the issued units in AOF for $3.04 cash.

Best and worst performers of the day

The best performing sector was S&P/ASX Materials adding 0.4 per cent while the worst performing sector was S&P/ASX Communication Services, shedding 1.3 per cent.

The best performing stock in the S&P/ASX 200 was Speedcast International Limited (ASX:SDA), rising 24.5 per cent to close at $0.96 with its shares bouncing up after its shares saw heavy selling last week after its Chairman since IPO (July 2014) stood down after the company’s headline result swung 35,000 per cent lower into a loss of $175.6 million, on the back of $154.8 million impairment. Shares in Western Areas Limited (ASX:WSA) and Independence Group Nl (ASX:IGO) followed higher.

The worst performing stock in the S&P/ASX 200 was Nearmap Ltd (ASX:NEA), dropping 6.6 per cent to close at $2.55 after a company director, Peter James sold down 400,000 shares in the company. Shares in Incitec Pivot Limited (ASX:IPL) and Service Stream Limited (ASX:SSM) followed lower.

Asian markets

Japan’s Nikkei has lost 0.3 per cent, Hong Kong’s Hang Seng has slipped 0.3 per cent and the Shanghai Composite has gained 1.4 per cent.

Commodities and the dollar

Gold is trading at US$1,524 an ounce.
Iron ore price gained 3.9 per cent to US$84.66
Iron ore futures are pointing to a rise of 5.6 per cent
Light crude is US$1.61 lower at US$55.10 a barrel.
One Australian dollar is buying 67.31 US cents.

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