The Australian sharemarket has reversed an early dip the beginning of the trading week as the big four bank stocks push higher, while property stocks are taking a hit on the back of falls in property prices.
The S&P/ASX200 Index is up 40 points, or 0.7 per cent, to 5796 points. Futures are pointing to a rise of 42 points.
Stronger iron ore prices are also helping to drive the local market higher as the commodity surpasses $100 a tonne. Fortescue Metals Group (ASX:FMG) has reached record highs this morning. its shares are trading up 3% at $14.31 - after rising 30 per in the past month. BHP and Rio Tinto are also higher. Iron ore prices have rallied strongly on concerns about supply from Brazilian producer Vale as COVID-19 sweeps through the country.
Meantime, geopolitical tensions, have seen investors flee to safe haven assets sending up gold prices. Producer, Gold Road has also reached fresh highs. It’s shares are up 0.8 per cent at $1.82. While Newcrest is up 0.5 per cent and Saracen has gained 0.4 per cent.Local economic news
According to fresh figures from CoreLogic five out of eight capital cities recorded a fall in property prices in May as the pain from the coronavirus pandemic spread to the housing market.
Nationally prices fell for the first time since June last year by 0.4 per cent – and Darwin led the downward charge among the capital cities recording a drop of 1.6 per cent.
But the national average drop of 0.4 per cent means the damage to the property market has been less than experts had anticipated for.
CoreLogic head of research Tim Lawless says Considering the weak economic conditions associated with the pandemic, a fall of less than half a percent in housing values over the month shows the market has remained resilient to a material correction.AiGroup PMI rises in April
The Australian Industry Group Performance of Manufacturing Index rose by 5.8 points to 41.6 in May. The rise comes on the back the largest single-month drop in the index’s history in April.
The manufacturing industry remained in deep contraction in May, as COVID-19 restrictions affected demand across the board. The decline slowed across all activity indices in May, except for the exports index which recorded its lowest ever monthly result as many overseas markets essentially shut down.CBA’s manufacturing PMI survey slips
CBA’s manufacturing PMI survey slipped to 44 in May, from 44.1 in April. Output fell to 36.5, compared to 37.2 in April. The May manufacturing PMI reading was a record low for the series. It was the ninth straight month of contraction for the index.Broker calls Citi rates ASB as Buy
Citi has maintained its buy rating on ship building company, Austal. It comes after the company upgraded its FY20 guidance. The broker says the company could benefit from opportunities in autonomous vehicles, hospital ships in the US and potential in the Philippines .Citi has raised the target to $4.05 from $3.38. An the market likes the news, Austal is among the top performers at lunch with its shares in Austal (ASX:ASB)
are trading 6.6 per cent higher at $3.56.Company news
The ACCC says it is continuing its enforcement investigation of Qantas' (ASX:QAN)
acquisition of a 19.9 per cent stake in Alliance Aviation. Australia’s biggest airline acquired the stake in the regional aviation provider, prompting the competition watchdog to issue a statement of issues in August last year. The ACCC says it is providing the update in "response to queries by various stakeholders", adding "we are concerned that competition by smaller airlines is not hindered." Shares in Qantas (ASX:QAN)
are up 0.5% to 4.01.Best and worst performers
The best-performing sector is healthcare, adding 2.2 per cent, while the worst performing sector is REITS, shedding 1.5 per cent. The best performing stock in the S&P/ASX 200 is Adbri (ASX:ABC)
, rising 8.1 per cent to $2.94, followed by shares Flight Centre (ASX:FLT)
and Austal (ASX:ASB)
The worst performing stock in the S&P/ASX 200 is Clinuvel (ASX:CUV)
,dropping 4.2 per cent to $23.20, followed by shares in Wisetech Global (ASX:WTC)
and SCA Property Group (ASX:SCP)
Higher: Japan’s Nikkei has gained 1.2 per cent, Hong Kong’s Hang Seng has gained 3.1 per cent and the Shanghai Composite is 1.3 per cent higher.Commodities and the dollar
Gold is trading at US$1,737 an ounce.
Iron ore price rose 5.5 per cent to US$102.39.
Iron ore futures are pointing to a rise of 4.3 per cent.
One Australian dollar is buying 67.22 US cents.