ASX rebounds on banks

Saturday, April 13, 2019

Shares enjoyed solid buying throughout Monday, largely boosted by investor appetite for most of the banks and energy stocks though Myer suffered some investor displeasure.
Nanjing Night Net

The benchmark S&P/ASX200 lifted 0.3 per cent higher to 5919.2 points and the broader All Ordinaries Index bumped up 0.2 per cent to 5983.7 points.

The Australian dollar traded at US76.75 cents after falling below the US77 cent mark last week for the first time since July.

Robust growth figures out of the United States last week reaffirmed the global view that the major economies are enjoying a synchronised upswing.

“Good global growth is good for the economy and therefore good for banks, so we’re seeing that in the market direction,” said Romano Sala Tenna, portfolio manager at Katana Asset Management.

“We also had a few nasty days last week so Monday is seeing a bit of a rebound. The banks might have been a bit oversold on the back of the ANZ result last week.”

ANZ finished the day up 0.7 per cent, National Australia Bank was up 0.7 per cent and Westpac also closed 0.7 per cent higher. Commonwealth Bank was the only bank to finish the day in the red, down 0.3 per cent.

Myer ended the day 3.2 per cent lower after the retailer’s largest shareholder, Solomon Lew threatened legal action against the company over the department store chain’s alleged lack of disclosure.

A bump in the oil price above $US60 a barrel saw investors pour into the energy names, with the sector finishing up 1.5 per cent for the day.

Australia’s largest oil producer Woodside Petroleum enjoyed a 1.3 per cent lift and Caltex, the country’s biggest oil refiner, closed up 0.2 per cent.

On the downside, Telstra was one of the worst performers, trading down 0.6 per cent. Property sector plays were also weak, with Westfield shares losing 1.4 per cent, Scentre down 0.7 per cent and LendLease lower by 1.6 per cent.

Insurers were also dragging, with QBE down 1 per cent and Insurance Australia Group down 0.6 per cent.

Iron ore play Fortescue slipped 1 per cent in the mining sector and South32 lost 0.9 per cent.

In other equities news, Sigma Healthcare fell after the company’s trading update revealed pharmaceutical giant Astra Zeneca will exclusively distribute a portion of its products direct to pharmacies, eroding around 1 per cent of Sigma’s sales. The stock closed the day down 4.9 per cent. Market MoversStock Watch: Hydroponics Company

Shares in diversified cannabis company rocketed 42 per cent higher to 32?? on Monday. Hydroponics announced that its wholly-owned subsidiary Canndeo has been granted a medicinal cannabis licence by the Office of Drug Control. The licence will allow the firm to advance commercial cultivation of Cannabis sativa, and supports THC’s dual strategy for supplying medicinal cannabis products to support patients in Australia by local production and importation. This is the second of three licences that the company has sought, with its Manufacturing Licence application lodged and waiting for approval. Oil

The price of brent crude shot up over $US60 a barrel on Monday amid speculation that OPEC may look to extend its supply-restraint deal, a move that has seen global stockpiles shrink and has offset rising US drill numbers. Prices have surged to levels not seen since 2015 when Saudi Arabia backed further cuts. Global inventories are down to about 160 million barrels above the five-year average and prices are heading toward “fair” levels, Qatar Energy Minister Mohammed Al Sada said on Sunday. US drillers added one rig last week, according to data released Friday. Brent crude was fetching $US60.41 a barrel at market close on Monday while West Texas Intermediate was trading at $US53.90 a barrel. Chinese stocks

A pronounced bond selloff in mainland China has seen the Chinese sharemarket drop the most since early August, shattering the Communist Party Congress induced calm. The Shanghai Composite Index fell as much as 0.4 per cent on Monday. Investors punished small-cap shares the most as the 10-year yield climbed 4 basis points to 3.89 per cent, a three year high, amid concern Chinese authorities will intensify a deleveraging program. Iron ore

The price of iron ore slid 2.3 per cent on Monday to $US60.08 a tonne as new data showed iron ore holdings at China’s ports have surged to the highest level in two months, adding to signs that the nation’s widespread curbs on steelmakers’ output are starting to bite as policy makers clamp down to try to ensure clean air over winter. Stockpiles expanded 2.7 per cent to 135.75 million tons last week to post the biggest gain since February, according to data from Shanghai Steelhome E-Commerce on Monday. That caps the fourth weekly rise in five, and puts holdings back on a path toward the record 141.5 million tons hit in June. Petrol prices

The price of petrol has soared to a 2-year highs, according to the Australian Institute of Petroleum. The national average Australian price of unleaded petrol rose by 9.0 cents last week to 136.4 cents a litre, reflecting the ending of discounting cycles in Sydney, Melbourne and Brisbane. It was the biggest weekly lift in the national petrol price in 13 years of records. “Petrol prices are coming down in Sydney, Melbourne and Brisbane and motorists can expect relief at the bowser over the next 7-10 days,” says Craig James, chief economist at CommSec. “But so far the price declines are much more tepid than in recent price cycles.”

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