Australia Market extends gain

Headline indices of the Australian share market were tad higher on Wednesday, 31 October 2018, as investors continued hunting for beaten down stocks on following the positive lead from Wall Street overnight. Most of ASX issues inclined with gains lead by banking stocks after ANZ Banking kick-started the banking sector's earnings results today, while losses in materials and resources capped upside. In late afternoon trades, the benchmark S&P/ASX200 index advanced 1.20 points, or 0.02%, at 5,806.30 points, while the broader All Ordinaries index grew 2.01 points, or 0.03%, to 5,889.90 points.

Shares of banks and financials were firmer, led by ANZ Banking, up almost 2%, after release of better than expected earnings results today. ANZ Banking reported a 5% decline in its full-year cash profit, its first since 2016, as it prepares for customer remediation costs in the aftermath of the royal commission. Westpac and National Australia Bank were up in a range of 0.5% to 1%. Commonwealth Bank's shares gained after the bank said it has agreed to sell its Colonial First State asset management business for A$4.13 billion to Japanese bank Mitsubishi UFJ Trust and Banking Corp. QBE Insurance shares gained after the company announced a streamlining of its operations, with its Asia Pacific no longer a separate division, with effect from January 1, 2019.

Shares of energy companies were mixed after crude oil prices settled at a two-month low overnight. WTI crude for December fell $0.86 or 1.3% to close at $66.18 a barrel on the New York Mercantile Exchange. Woodside Petroleum gained more than 1%, while Santos and Oil Search were lower in a range of 0.5% to 2%. Origin Energy gained after the Company reported a 12% increase in oil and gas revenue for the September quarter, while production remained steady.

Shares of materials and resources companies were mostly weaker on concerns that an escalating US-China trade war could hurt demand. US President Donald Trump is reportedly expected to announce tariffs on all remaining imports of Chinese goods in December if trade talks fail. Shares of BHP Billiton, Rio Tinto, and Fortescue both were down in a range of 0.5% to 1%.

ECONOMIC NEWS: the Australian Bureau of Statistics said on Wednesday that consumer prices in Australia were up 0.4% on quarter in the third quarter of 2018, unchanged from the previous three months. On a yearly basis, consumer prices advanced 1.9%, down from 2.1% in the three months prior. Underlying inflation the RBA's preferred measure which strips out volatile items such as food and fuel fell to 1.6% over the year, its lowest level since early 2017.

Core inflation has now undershot the RBA's long-term target band of 2% to 3% for the 11th quarter on the trot, the longest run of misses on record. The RBA had already flagged consumer prices will remain depressed toward the end of the year before picking up next year. It, however, does not see the core measure hopping back to the mid-point of its target throughout December 2020.

CURRENCY: Australian Dollar was higher against greenback and other major currencies on Wednesday. The Australian dollar was quoted at $0.7106, up from $0.7093 on Tuesday.

OFFSHORE MARKET: US stock market closed higher on Tuesday. The Dow Jones Industrial Average soared 431.72 points or 1.8% to 24,874.64, the Nasdaq jumped 111.36 points or 1.6% to 7,161.65 and the S&P 500 surged up 41.38 points or 1.6% to 2,682.63.

European markets ended mixed Tuesday. The U.K.'s FTSE 100 Index inched up by 0.1%, while the French CAC 40 Index dipped by 0.2% and the German DAX Index fell by 0.4%.

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