Australia Market rises 0.7%

Headline equities of the Australia stock market inclined on Thursday, 09 August 2018, as gains in shares of financials and consumer discretionary sectors were more than offset by weakness in the energy and materials sectors amid escalating U.S.-China trade tensions and the overnight fall in crude oil prices. Around late afternoon, the benchmark S&P/ASX 200 Index inclined 42.17 points, or 0.7%, to 6,310.70. The broader All Ordinaries Index was up 41.45 points, or 0.65%, to 6,396.30.

Shares of financials and consumer discretionary sectors were key contributor to the benchmark rally, helped by positively-received results from Suncorp (SUN), Magellan Financial (MFG) and Crown Resorts (CWN).Among top four banks, Commonwealth Bank of Australia, ANZ Bank, Westpac, and National Australia Bank were up in a range of 0.5% to 1%.

 

Shares of energy and material sectors declined, as investors focused on the escalating U.S.-China trade tensions and the overnight fall in crude oil prices. China said it will impose 25% tariffs on an additional $16 billion worth of imports from the U.S. from Aug. 23, matching Washington's latest move in the trade war. Crude oil prices declined sharply on Wednesday as the escalating U.S.-China trade dispute raised concerns about the outlook for global economic growth and demand for oil. WTI crude for September fell $2.23 or 3.2% to close at $66.94 a barrel, a seven-week low. Among miners, Rio Tinto, BHP Billiton, and Fortescue Metals declined in a range of 1-3%. Among energy stocks, Woodside Petroleum,Santos and Oil Search were down in a range of 1% to 2%.

Among individual stocks: Suncorp has reported 1.5% drop in net profit to A$1.059 billion on the back of 11.2% drop in revenue to A$15.452 billion for fiscal year ended June 2018, due to rise in operating expenses and claims. Suncorp also announced it will sell its life insurance business to TAL Dai-ichi Life for A$725 million. Suncorp shares were 5% higher.

AGL has posted net profit of A$1.587 billion for fiscal year ended June 2018, nearly three times higher than the year before due to changes to valuations of hedging contracts. Total revenue grew 1.8% to A$12.816 billion. AGL shares were down as much as 4%.

Crown shares inclined 5% despite mixed trade over FY18. Annual net profit fell 70%, but before significant items (including proceeds from the sale of its Macau resort in FY17), net profit lifted 6% to A$327 million.

CURRENCY NEWS: The Australian dollar was higher against greenback and other major currencies. The Australian dollar is buying 74.29 US cents, from 74.23 US cents on Wednesday.

OFFSHORE MARKET NEWS, US stock market closed softer on Wednesday. The Dow Jones Industrial Average closed down 45.16 points, or 0.18% at 25,583.75 points, while the S&P500 was down 0.75 points or 0.03% at 2,857.7 points. The tech-heavy NASDAQ index was up 4.66 points or 0.06% at 7,888.3 points.

The major European markets ended mixed on Wednesday. The U.K.'s FTSE 100 Index advanced by 0.8%, while the German DAX Index dipped by 0.1% and the French CAC 40 Index fell by 0.4%.

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