Following strong leads from the US markets, the Australian share market opened with a bang and we saw a sharp spike in the first 20 minutes of the session. The momentum faded as we moved into the middle of the session. The S&P/ASX200 is tracking 0.1 per cent higher at noon. About half of the sectors have made gains with Health Care boosting the market in the first two hours of trade.
The S&P/ASX 200 index is 4 points higher at 6,497. On the futures market the SPI is 0.1 per cent higher.
Local economic news
Figures released today from the Australian Bureau of Statistics show that Australian retail turnover rose 0.4 per cent in August 2019 in seasonally adjusted terms. This follows a relatively unchanged result (0.0 per cent) in July 2019.
The Reserve Bank of Australia has released its Financial Stability Review. The review found that “uncertainty about the outlook for global economic growth has increased since the previous Financial Stability Review, with a greater chance of weak growth”. It attributes this bearish sentiment to the US-China trade and technology disputes, the escalation of tensions in Hong Kong and the Middle East and the potential for a disorderly Brexit, each of which could trigger a slowdown.
UBS has downgraded construction, property and infrastructure company Lendlease Group (ASX:LLC) from a buy to a neutral, with a 12-month price target of $17.50. UBS believes the market is pricing in a solid outcome for the sale of the engineering and services business. They advocate that net sale proceeds could be materially lower than the market expects given the higher than expected negative working capital balance in that division. Shares in Lendlease Group (ASX:LLC) are trading 1.7 per cent lower at $16.79.
Shares in the Commonwealth Bank of Australia (ASX:CBA) have taken a dip this morning following news that the Director of Public Prosecutions has served criminal proceedings on its subsidiary, Colonial Mutual Life Assurance Society. The proceedings related to 87 alleged contraventions of the anti-hawking provisions of the Corporations Act 2001 (Cth). The hawking provisions prohibit companies from offering financial products in the course of unsolicited meetings or telephone calls with retail clients. The alleged contraventions relate to telephone sales of Simple Life insurance products during 2014. Shares in the Commonwealth Bank of Australia (ASX:CBA) are trading 0.3 per cent lower at $77.13.
Best and worst performers
The best-performing sector is Health Care, adding 1.9 per cent, while the worst performing sector is Financials, shedding 0.6 per cent.
The best performing stock in the S&P/ASX 200 is Jumbo Interactive (ASX:JIN), rising 5 per cent to $26.64, followed by shares in Speedcast International (ASX:SDA) and Nearmap (ASX:NEA).
The worst performing stock in the S&P/ASX 200 is St Barbara (ASX:SBM),dropping 2.8 per cent to $2.76, followed by shares in Mayne Pharma Group (ASX:MYX) and Galaxy Resources (ASX:GXY).
Japan’s Nikkei has lost 0.2 per cent, Hong Kong’s Hang Seng has shed 0.1 per cent and the Shanghai Composite is closed due to the National Holiday period.
Commodities and the dollar
Gold is trading at US$1,509 an ounce.
Iron ore futures are pointing to a rise of 2.5 per cent.
One Australian dollar is buying 67.52 US cents.