Shares of materials and resources companies were key contributor to the index gains despite lower base metal prices. BHP Billiton led the gains in the materials space after posting encouraging production numbers. The miner met or exceeded FY18 production guidance for petroleum, copper, iron ore & energy coal. BHP reported a 3% increase in total iron ore production for the 2018 financial year to a record 238 Mt (275 Mt on a 100 per cent basis). Western Australian Iron Ore (WAIO) production is expected to be between 241 and 250 Mt, or between 273 and 283 Mt on a 100 per in the 2019 financial year. Rio Tinto and Fortescue Metals were up in a range of 05%-1%.
In the banking sector, ANZ Banking, Commonwealth Bank, Westpac and National Australia Bank are advancing in a range of 0.3 percent to 0.6 percent. Commonwealth Bank's Bankwest unit will close 29 branches along Australia's east coast and cut 200 jobs as customers increasingly shift to using mobile banking.
Gold stocks were mixed after prices for the yellow metal hit a 12 month low overnight. Shares in Northern Star (NST) were down after reporting record gold production. The June quarter saw NST produce 183,949oz, ahead of the company's targeted run rate of 600,000oz per annum. Production in FY18 totalled 575,121oz, which bettered forecast guidance of 540,000-560,000oz. In 2019, NST is guiding for production of 600,000-640,000oz at an all in sustaining cost (AISC) of A$1,025-1,125/oz Evolution Mining rose 1%, while Newcrest Mining fell 2%.
Shares of energy stocks were mostly lower after crude oil prices dropped again, after an industry group reported that US crude inventories rose last week, defying analysts' expectations of a significant reduction. Woodside Petroleum and Santos were down in a range of 05%-1%.
Bega Cheese (BGA) were up after reports that it had entered into an agreement to buy Saputo Dairy Australia's (SDA) Koroit dairy processing facility in Western Victoria for A$250m. The Koroit Facility currently processes approximately 300 million litres anually.
CURRENCY NEWS: The Australian dollar is lower against the U.S. dollar on Wednesday. The local currency was quoted at US$0.7386, down from US$0.7431 on Tuesday.
OFFSHORE MARKET NEWS: US stock market closed higher on Tuesday, after Fed chair Jerome Powell reiterated his quiet optimism for the US economy. In testimony to the US Senate Banking Committee, Mr Powell said the outlook was bright and that Fed policymakers believe that "with appropriate monetary policy, the job market will remain strong and inflation will stay near 2% over the next several years". Investors focused on company earnings, which aside from Netflix were mostly good. The S&P 500 index rose 11.12 points, or 0.4%, to 2,809.55. The Dow Jones Industrial Average gained 55.53 points, or 0.2%, to 25,119.89. The Nasdaq composite jumped 49.40 points, or 0.6%, to 7,855.12.
The major European markets also ended higher on Tuesday. The STOXX600 index lifted up 0.2%. The German export-focused DAX index gained 0.8%. The UK FTSE index rose by 0.3%.
COMMODITY NEWS: Crude oil price was little changed on Tuesday after a period of volatility. Benchmark U.S. crude erased an early loss and finished little changed at $68.08 a barrel in New York. Brent crude, used to price international oils, picked up 0.4% to $72.16 a barrel in London.
Base metal prices mostly declined on the London Metal Exchange on Tuesday due to US dollar strength. Aluminium was the worst performer (-1.9%), but zinc rebounded by 1.3%. Gold dripped 1% to $1,227.30 an ounce. Silver sank 1.2% to $15.62 an ounce.
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