Wall St trips as tech dips: ASX to open higher


The Australian share market is to open higher despite Wall St’s pullback led by technology shares. All three indexes closed in the red as inflation fears continued to linger which triggered an equity sell-down last week across the globe. Electric car maker Tesla fell over 2 per cent, Microsoft dropped 1.2 per cent with Apple and Netflix closing lower. Investors bought into stocks inversely related to the market with the likes of Gold up 4.6 per cent with shares linked to the reopening of the economy also advancing. Across the Atlantic, European markets closed slightly lower despite the easing of restrictions in the UK with heavyweight miners Rio Tinto and BHP closing higher as the price of iron ore rose. In Asian markets which closed mix as investors digested China’s economic data after signs of growth was in-line with expectations. Oil prices advanced as recovery in demand lifted optimism while back home, Aussie dollar rose against the dip in the greenback. 

Figures from around the globe

Wall Street closed lower yesterday, the Dow Jones Industrial Average fell 0.2 per cent to 34,328, the S&P 500 lost 0.3 per cent to 4,163 and the NASDAQ closed 0.4 per cent lower at 13,379 points.

European markets closed lower, London’s FTSE lost 0.2 per cent, Paris fell 0.3 per cent and Frankfurt closed 0.1 per cent lower.

Asian markets closed mixed, Tokyo’s Nikkei dropped 0.9 per cent, Hong Kong’s Hang Seng gained 0.6 per cent while and China’s Shanghai Composite closed 0.8 per cent higher.

­Taking all of this into equation, the SPI futures are pointing to 0.2 per cent gain.

ASX 200

Yesterday, the Australian share market closed 0.1 per cent higher at 7,024 lifted from 4-week lows led by Technology and Energy shares. Accounting software company Xero (ASX:XRO) boosted the tech sector jumping 5.6 per cent as investors pushed aside their disappointment on the company’s earnings results from last week while Viva Energy (ASX:VEA) fuelled the sector closing 7.1 per cent higher following the news of a $2.3 billion stimulus package. Gold stocks sparkled as the price rallied to 3-month highs with the likes of Northern Star Resources (ASX:NST) up 6 per cent with Evolution Mining (ASX:EVN) adding 5.4 per cent. On a not so positive note, Utilities was named the worst performing sector with Carsales.com (ASX:CAR) as the worst performing stock, which spiralled down by 11 per cent on an update on their US capital raising. On the banking front, Commonwealth Bank (ASX:CBA) surged to fresh record highs.

Local economic news

The minutes of the Reserve Bank’s board and the ANZ and Roy Morgan weekly consumer sentiment report is scheduled today. Given the Statement on Monetary Policy which consists of economic forecasts followed shortly after the board meeting, it’s expected that no new indicators will be given. The RBA has increased their GDP forecasts and reduced their unemployment rate forecasts with wages growth and inflation to remain soft over the next few years. 

Broker moves

Morgan Stanley rates Treasury Wine Estate (ASX:TWE) as an add with a target price of $13. The upgrade from a hold follows the company’s lifted profit forecasts over the next three financial years as they shift to brand portfolios rather than regions, raising the target price to $13 from $11.10. Shares in Treasury Wine Estates (ASX:TWE) closed 2.31 per cent higher at $11.09 yesterday.

Ord Minnett rates TPG Telecom (ASX:TPM) as a buy from a hold with a target price of $6.45. The broker believes the management change and subscriber numbers have been the key drivers of their underperformance. Despite this, the broker expects strong earnings growth partly driven by cost synergies following the merger with Hutchinsons Telecommunications last year. Shares in TPG Telecom (ASX:TPM) closed 1.71 per cent lower at $5.17 yesterday.

IPOs

Keep an eye out for headphones and listening devices company, Audeara (ASX:AUA) set to make their debut today.

Ex-Div

WAM Active Limited (ASX:WAA) is paying 3 cents fully franked

Currencies

One Australian Dollar at 7:30 AM was buying 77.72 US cents, 55.00 Pence Sterling, 84.89 Yen and 63.96 Euro cents.

Commodities

Iron Ore has gained 4.3 per cent to US$217.77.
Iron Ore futures suggest a 3.7 per cent gain.
Gold has added $29.50 to US$1868 an ounce.
Silver has gained $0.91 to US$28.27 an ounce.
Oil has added $0.90 to US$66.27 a barrel.
 

Are you a 708 sophisticated investor?

A sophisticated investor is defined under Section 708 of the Corporations Act (net assets of $2.5 million or annual incomes in excess of $250,000).

They are eligible to receive information regarding wholesale investment opportunities that are not available to regular or retail investors.

Please subscribe if you would like to be alerted to these types of opportunities.