Australia Market falls on profit booking

Headline indices of the Australian stock market declined on Thursday, 04 April 2019, as investors elected to withdraw profit off the table after its recent run of gains to seven days and hitting fresh 7-month highs yesterday. However, market losses capped on improved hopes of a trade deal to be reached between the US and China. All ASX sectors declined, with energy, healthcare, financials, industrials, and materials sectors being notable losers. Around late afternoon trade, the benchmark S&P/ASX200 index declined 57.94 points, or 0.9%, at 6,227.10 points, while the broader All Ordinaries fell 54.03 points, or 0.85%, at 6,314.70.

Shares of oil & gas producers such as Woodside (WPL), Santos (STO) and Beach Energy (BPT) were down in between 1.5% to 3%, after a drop in oil prices. Crude oil futures snapped a three-day winning streak on Wednesday after data showed an unexpected jump in U.S. crude inventories. WTI crude for May ended down $0.12 or 0.2% at $62.46 a barrel on the New York Mercantile Exchange.

 

The materials sector was also being weighed down by the major miners despite a near 4% jump in ore prices as supply concerns drive prices higher. BHP Group (BHP), Rio Tinto (RIO) and Fortescue Metals (FMG) were all weaker.

The big four banks were all lower, with ANZ down 0.7% to A$26.25, Commonwealth down 0.4% to A$71.09, NAB down 0.7% to A$25.18, and Westpac down 0.6% to A$26.18.

Syrah Resources (SYR) jumped 11% after the graphite miner provided a quarterly update for its Balama mine operation in Mozambique. Quarterly production beat the company's own guidance while the average graphite price was at the upper end of its target range.

Elsewhere, Graincorp (GNC) was 3.3% higher after it announced a spin-off of its global malt business from its grains and oils business by the end of 2019. The demerger would create two separate ASX-listed companies and will also enable the acceleration of a number of cost reduction initiatives across the simplified business.

CURRENCY: The Australian dollar continued to strengthen against the U.S. dollar on Thursday, after strong February retail sales and trade surplus numbers released yesterday. The Australian dollar was quoted at 71.24 US cents, from 71.07 US cents on Wednesday.

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