The Australian share market opened lower as expected, with no leads to follow as Wall Street was closed for Labor Day, but stronger than expected Australian surplus data, saw the market rise out of the red, but we closed lower on disappointing retail sales, coupled with Wall Street futures suggesting a negative start to their session.
We saw the Australian dollar fall to a new low 67.06 US cents (earlier), a level last hit almost 10.5 years ago, March 2009. And Nickel prices hit five-year highs on Monday on supply shortages fears. The nickel price surge is boding well for Independence Group (ASX:IGO) as its shares are trading at four year highs, YTD its shares are 60 per cent higher. While, the iron ore price has continued its claw back, rising 7 per cent after gaining 4 per cent in the prior session.
At the closing bell the S&P/ASX 200 index closed 6 points lower to finish at 6,573.
Dow futures are suggesting a fall of 168 points.
S&P 500 futures are eyeing a fall of 18 points.
The Nasdaq futures are eyeing a fall 57 points.
And the ASX200 futures are eyeing a fall of 0.1 per cent or 13 points
RBA kept interest rates on hold at 1 per cent as expected saying it extends ‘a period of low interest rates will be required in Australia to make progress in reducing unemployment and achieve more assured progress towards the inflation target’. The Board will continue to monitor developments, the labour market, and ease monetary policy if needed to support sustainable growth in the economy and the achievement of the inflation target over time. Inflation pressures remain subdued and it’s expected to be a under 2 per cent over 2020 and a little above 2 per cent over 2021.
Australia has reported its first surplus in goods and services in 44 years. Australia’s trade or external position was released from ABS today, known as the current account, showing Australia’s biggest surplus on record, at $19.9 billion. The latest figures also slowed a narrowing net income deficit to $13.9 billion, which added to Australia recording a $5.9 billion current account surplus for the June quarter 2019 (seasonally adjusted). Australia first positive current account deficit since 1975, as expected by the market. However, it was a massive beat compared to the expected $1.4 billion surplus that most economists expected.
Chief Economist at the ABS, Bruce Hockman says, ‘six consecutive quarters of goods and services surpluses, broadly commodity driven, have laid the foundation for our first current account surplus in 44 years’.
Retail sales meantime came out from the ABS, showing a 0.1 per cent fall in turnover in July, versus the expected 0.2 per cent gain.
Global packaging company Amcor (ASX:AMC) announced a dividend of US$0.12 per share for the quarter, payable on 8 October 2019. Its earnings in FY19 grew on the prior year, rising 6 per cent to $1.09 billion. Its guidance for FY2020 EPS is 61-64 cents, a rise of 5-10 per cent on FY19’s 58.2 cents on the back of the Bemis acquisition, couple with divestments (sales) and balance sheet refinancing. Shares in Amcor (ASX:AMC) closed 0.5 per cent higher at $14.50.
Medibank (ASX:MPL) responded to the ACCC in relation to some of its ahm customers who held Boost or Lite products from 2013 and 2018. The competition watchdog alleges that Medibank made false representations about benefits covered by its insurance policies, in breach of the Australian Consumer Law. ahm has paid 175 customers, around $745,691.
Oil and gas exploration company which operates all of PNG’s oilfields Oil Search (ASX:OSH) is expecting that a formal Ministerial statement on the review of the PNG LNG deal will be released later today. The future of the gas deal came into doubt after Prime Minister James Marape came to power in May. The PNG Cabinet (National Executive Council) wrapped up the review of the Papua LNG Gas Agreement yesterday
Senex Energy (ASX:SXY) announced its Surat Basin natural gas development projects are on schedule and on budget, with excellent recent progress at both Project Atlas and Roma North.
Best and worst performers of the day
The best performing sector was Industrials, adding 0.4 per cent while the worst performing sector was Telco Services, shedding 0.6 per cent.
The best performing stock in the S&P/ASX 200 was Speedcast International (ASX:SDA), rising 20.8 per cent to close at $1.16. Shares in Western Areas (ASX:WSA) and Bellamy’s Australia (ASX:BAL) followed higher.
The worst performing stock in the S&P/ASX 200 was TPG Telecom (ASX:TPM) dropping 4.7 per cent to close at $6.29. Shares in Spark Infrastructure Group (ASX:SKI) and GrainCorp (ASX:GNC) followed lower.
Japan’s Nikkei has gained 0.02 per cent, Hong Kong’s Hang Seng has lost 0.4 per cent and the Shanghai Composite has lost 0.1 per cent.
Commodities and the dollar
Gold is trading at US$1,527 an ounce.
Iron ore price is trading 7.0 per cent higher at US$90.58.
Iron ore futures are pointing to a rise of 2.5 per cent.
Light crude is US$0.33 down at US$54.77 a barrel.
One Australian dollar is buying 67.22 US cents.