Sharemarket rallies on record housing data: Aus shares close 0.8% lower

Market Reports

by Katrina Bullock

The Australian share market made gains in the back half of the trading session off the back of positive housing data and projections that a cash rate cut may be around the corner. But it was not enough to counteract this morning’s losses. The ASX200 index closed 0.8 per cent lower. With the Reserve Bank of Australia set to meet tomorrow, Banks are hypothesising whether a potential cash rate cut is on the cards. ANZ Head of Australian economics David Plank expects the RBA to keep the cash rate on hold; while Citi Economist Josh Williamson expects the RBA to cut rates twice in the next two months to offset the rising economic threat of coronavirus, starting with a 25 basis point cut tomorrow. NAB Group’s Chief Economist Alan Oster even noted the possibility of a 50 basis point cut tomorrow. Most of the sectors closed in the red. The Financial sector saw the greatest losses. WiseTech Global (ASX:WTC) continued its bullish rally climbing around 13 per cent today.

The S&P/ASX200 index

At the closing bell the S&P/ASX 200 index closed 50 points lower to finish at 6,392.

Futures markets 

Dow futures are suggesting a rise of 139 points.
S&P 500 futures are eyeing a rise of 13 points.
The Nasdaq futures are eyeing a lift of 42 points.
That optimism has not flowed through to the Australian market. And the ASX200 futures are eyeing a 11 point fall tomorrow morning.

Broker moves

Morgans rates Afterpay (ASX:APT) as an add with a 12 month price target of $39.92. While first half loss was greater than the broker expected, top-line growth was strong. The broker believes the company's penetration of offshore markets will drive substantial upside over time. Shares in Afterpay (ASX:APT) closed 1.6 per cent lower at $32.64.

Economic news

Corelogic has released its dwelling figures for February 2020. The index results confirmed that nationally housing values increased by 1.1 per cent over the month. The strongest gains were seen in Australia’s capital cities with five of the eight capital cities reaching record highs. Sydney was the star performer, rising 1.7 per cent, followed by Melbourne which gained 1.2 per cent. The other capital cities recorded more modest gains, with Darwin bucking the trend and moving 1.4 per cent lower.

AiGroup has released the performance of manufacturing figures for February. The Index fell a further 1.1 points to 44.3 points in February. This marked four consecutive months of contraction in Australian manufacturing – the longest downward trend since 2014. This is also the lowest monthly result in almost 5 years. Despite the negative news, the figure did manage to beat the market’s expectation of 44 points.

Company news

Elanor Commercial Property Fund (ASX:ECF) has settled its acquisition of Garema Court, CBD Canberra for $71.5 million. This brings ECF’s portfolio to seven commercial properties with a combined value of $378 million. The property is 99 per cent occupied, with its office space wholly leased to the Commonwealth of Australia until March 2024. A new debt facility has been implemented to fund the Garema Court acquisition and repay all existing debt, resetting the fund’s debt at an average interest rate of 2.1 per cent per annum. Shares in Elanor Commercial Property Fund (ASX:ECF) closed 2.9 per cent higher at $1.25.

Splitit Payments (ASX:SPT) today announced it is partnering with Visa to help accelerate their distribution of instalment payments for merchants.

Bega Cheese (ASX:BGA) today announced its interim financial results for the half year ended 29 December 2019 showing net profit for the period up 71 per cent to $8.5 million.

The board of Caltex Australia (ASX:CTX) has concluded that the EG Proposal undervalues the Company and does not represent compelling value for Caltex’s shareholders.

Best and worst performers of the day

The best performing sector was Energy adding 1.1 per cent while the worst performing sector was Financials, shedding 1.5 per cent.

The best performing stock in the S&P/ASX 200 was WiseTech Global (ASX:WTC), rising 12.7 per cent to close at $17.02. Shares in Polynovo (ASX:PNV) and Appen (ASX:APX) followed higher.

The worst performing stock in the S&P/ASX 200 was Fortescue Metals Group (ASX:FMG), dropping around 9 per cent to close at $9.17. Shares in Resolute Mining (ASX:RSG) and Regis Resources (ASX:RRL) followed lower.

Asian markets

Higher: Japan’s Nikkei has added 0.9 per cent, Hong Kong’s Hang Seng has added 0.8 per cent and the Shanghai Composite has gained 3 per cent.

Commodities and the dollar

Gold is trading at US$1,602 an ounce.
Iron ore price fell 2.1 per cent to US$83.96.
Iron ore futures are pointing to a rise of 5.4 per cent.
Light crude is US$1.28 higher at US$46.04 a barrel.
One Australian dollar is buying 65.15 US cents.