Westpac profit plunges 15% dragging down the banks: ASX 0.4% higher at noon

Market Reports

by Anna Napoli

The Australian sharemarket has dulled its early rise but most sectors are in the green at midday. Pressure on banks has continued after Westpac reported a 15 per cent drop in profit. Westpac is in a trading halt ahead of a capital raise but the remainder of the big four banks have sustained losses. CSR is the best performer on the back of a broker upgrade while NRW Holdings is also in the top 3 after confirming reports of takeover discussions with BGC Contracting. The S&P/ASX 200 index is 0.4 per cent higher at 6698. On the futures market the SPI is 19 points higher.

Broker moves

Citi has upgraded CSR to Neutral from Sell following an interim report that turned out "in line", with a special dividend surprise and rather soft guidance for FY20. Citi analysts suggest the strong share price response was likely due to short covering on the day. Property earnings were stronger and there is expectation the domestic housing cycle might be about to turn, which should underpin further improvement. Falling coal prices could benefit the aluminium operations, suggest the analysts. CSR is among the best performers rising 7.5 per cent after Citi upgraded the stock at $4.66.

Local economic news

Retail sales rose 0.2 per cent in September, half of the 0.4 per cent expected by the market. For the quarter, retail trade was 0.1per cent lower, versus expectations of 0.2 per cent. Tax cuts, three interest rate cuts and employment growth of 2.5 per cent were still not enough to lift consumer spending as strongly as the government would have hoped.

Company news

Pro Medicus (ASX:PME) has signed a 5-year contract with The Ohio State University Wexler Medical Center (OSUWMC). The center is a large multi-disciplinary academic medical center located in Columbus, Ohio. The contract, based on a transaction-based licensing model, will see Pro Medicus’ Visage 7 technology implemented across all of OSUWMC’s radiology departments spanning seven (7) hospitals and outpatient clinics. Shares in Pro Medicus (ASX:PME) 2.2 per cent higherat $25.17.

Best and worst performers

The best-performing sector is materials adding 1.8 per cent, while the worst performing sector is Financials, shedding 0.7 per cent.

The best performing stock in the S&P/ASX 200 is CSR(ASX:EHE) rising 7.5 per cent to $4.66, followed by shares in Southern Cross Media Group (ASX:SXL) and NRW Holdings (ASX:NWH).

The worst performing stock in the S&P/ASX 200 is Collins foods (ASX:CKF), dropping 3.4 per cent to $9.83, followed by shares in National Australia Bank (ASX:NAB) and Costa Group Holdings (ASX:CGC).

Commodities and the dollar

Gold is trading at US$1,511 an ounce.
Iron ore price shed 0.5 per cent to US$85.56
Iron ore futures are pointing to a fall of 0.9 per cent.
Light crude 2.02 higher 56.20
One Australian dollar is buying 69.08 US cents.