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The ASX surrendered a three-month high, declining for the first time in three sessions after weekend trade talks failed to bring fresh buying catalysts.

The benchmark index, the ASX 200, fell 34 points or 0.5 per cent to 6759 as US stock index futures opened in the red. S&P 500 futures dropped three points or 0.1 per cent.

Wall Street hit record highs on Friday ahead of top-level trade talks with China. Chinese state media said Vice Premier Liu Hie held “constructive discussions” on Saturday with US Treasury Secretary Steen Mnuchin and Trade Representative Robert Lighthizer. The two sides discussed each other’s “core concerns” and agreed to “maintain close communication”, according to a Xinhua report. The White House did not comment.

The local market appeared to pre-empt a strong night on Wall Street, the ASX 200 surging 59 points or 0.9 per cent on Friday as news of the talks hit newswires. Much of those gains evaporated this morning as the weekend passed with no evidence of significant progress.  

Consumer discretionary was the only sector to trade higher during a downbeat morning, boosted by hints last week from Federal Treasurer Josh Frydenberg that the government might consider bringing forward tax cuts scheduled for 2022. Wesfarmers rose 0.2 per cent to a record high. Pokie-maker Aristocrat Leisure added 2 per cent, Crown Resorts 0.2 per cent and JB Hi-Fi  0.2 per cent.

The other ten sectors retreated, with utilities and health stocks taking the biggest hit, and energy and resource stocks faring best. Notable falls included Seven West Media down 4 per cent, Domino’s Pizza off 3.2 per cent  and AMP 2.6 per cent.     

 IVF specialist Monash Group declined 1.4 per cent after downgrading its profit outlook following the exit of five referring doctors. Coal miner Coronado shed 7.2 per cent after a deteriorating coal price and weak demand from Europe and Brazil prompted the company to lower earnings expectations. Online lender Prospa Group plunged 27.5 per cent to an all-time low as the company revealed it expects revenue to miss its prospectus forecast by eight per cent.  

 The junior end of the market delivered a couple of big winners. Heramed jumped 23.3 per cent on news the US Food and Drug Administration have greenlighted  the meditech’s HeraBEAT device for monitoring foetal heart rates. Imugene’s extraordinary run continued, with shares that traded for 2.3 cents last week hitting 6.3 cents this morning after a general meeting of shareholders approved the acquisition of unlisted Vaxinia, which is developing a pox virus with potential applications for treating cancer.  

What’s hot today and what’s not:

Hot today: tech leader Appen bucked the trend on a morning characterised by profit downgrades. Shares in the artificial intelligence developer rallied 11 per cent to their strongest level in two months after the company raised its forecast for full-year earnings before interest and tax to $96 – $99 million from previous guidance of $85 – $90 million. The upgrade was driven by increased revenue and margins, much of it from existing customers.

Not today: shareholders rarely respond well to news a well-regarded CEO is leaving. Shares in fleet manager Smartgroup slumped 13.6 per cent to a three-month nadir on news Managing Director and CEO Deven Billimoria will retire in February. Chief Financial Officer Tim Looi will take over. The company reaffirmed earnings guidance.

Asian markets were mixed. China’s Shanghai Composite dropped 0.3 per cent, Hong Kong’s Hang Seng gained 0.6 per cent and Japan’s Nikkei edged up 0.1 per cent.

Turning to commodity markets, Brent crude futures faded four cents or 0.1 per cent this morning to $US63.26 a barrel. Gold eased $1.70 or 0.1 per cent to $US1,466.90 an ounce.

On currency markets, the dollar was steady at 68.12 US cents.

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