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A week of fleeting gains and steady fades continued as the ASX struggled once more to retain a solid initial advance.

In a pattern frustratingly familiar to traders, the ASX 200 bolted out of the gate, then steadily lost ground. By mid-session, the index had turned an initial gain of 18 points into a loss of three points or almost 0.1 per cent at 6694.

The market mood appeared to sour after a Chinese mouthpiece warned China will reject a proposed trade deal unless the US abandons further tariffs. The state-owned Global Times tweeted: “China will not accept a phase-one deal if the US does not suspend additional tariffs on Chinese goods, in addition to scrapping threatened tariffs planned for December.”

Energy and bank stocks cushioned the market from a deeper loss. Woodside Petroleum rose 0.3 per cent to a six-week peak after crude oil settled at its highest level since September. Santos put on 0.6 per cent, Viva Energy 1.2 per cent and Oil Search 1.9 per cent. Brent crude rallied 1.3 per cent overnight and this morning retreated 30 cents or 0.5 per cent to $US62.66 a barrel.

The financial sector, which plumbed a four-week low yesterday following disappointing trading updates from ANZ and Westpac, mounted a tepid recovery. ANZ edged up 0.4 per cen. Westpac and CBA both added 0.7 per cent. NAB, which reports tomorrow, dipped 0.2 per cent. Bank of Queensland slipped 3.5 per cent as it traded without its dividend.

A bearish broker forecast from UBS on Fortescue kept a lid on the resources sector. Shares in Fortescue declined 1.2 per cent after the broker reaffirmed its ‘Sell’ rating on the stock with a target price 20 per cent  below current levels. BHP advanced 1.6 per cent to a six-week high.

Boral fell 1.4 per cent after the construction company reaffirmed it expects net profit after tax to be 5 – 15 per cent lower this financial year than in 2019 due to challenging market conditions.

Investment manager Pendal Group jumped 9.8 per cent to a six-month peak after Chief Executive Emilio Gonzalez forecast better times ahead following a 23.5 per cent slump in full-year net profit after tax. Coca-Cola Amatil climbed 2 per cent following a broker upgrade from Ord Minnett.

What’s hot today and what’s not:

Hot today: Avita Medical is on a roll after revealing last week that its Recell system for treating burns was gaining traction in the US. Avita declared sales of Recell increased 60 per cent last quarter as a sales drive gathered pace. Shares rose 4.4 per cent this morning to a 12-year high.  

Not today: Medibank called for government reform after warning rising claims were pressuring margins for private health insurers. The company revealed that claims last financial year cost the company $21 million more than originally set aside. Claims per policy grew at 2.4 per cent over the course of a year when the company had budgeted for growth of 2 per cent. The company blamed higher private hospital payments  and the rising cost of prosthetics. The share price tumbled 8.4 per cent to its lowest level since mid-May.

Asian markets were little changed. China’s Shanghai Composite slipped 0.1 per cent, Hong Kong’s Hang Seng shed 0.4 per cent and Japan’s Nikkei advanced 0.1 per cent. S&P 500 index futures were recently down three points or 0.1 per cent.

Turning to commodity markets, gold futures improved $3.40 or 0.2 per cent to $US1,487.10 an ounce.

On currency markets, the dollar was steady at 68.95 US cents.

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