A rebound in resource stocks helped the ASX trim its loss for the week as the banks plumbed fresh multi-month lows.
The benchmark index, the ASX 200, bounced 43 points or 0.6 per cent to 6715 by mid-session. Today’s rally trimmed the weekly loss to 78 points and acted as a circuit-breaker following two days of heavy selling. The index hit a three-week low yesterday as fresh doubts over the US’s on-again-off-again trade deal with China compounded concerns over bank behaviour.
Sentiment towards the big four remained sour as the Westpac board met this morning to consider their response to accusations the bank failed for years to comply with anti-money laundering legislation. The company’s shares slumped 1.2 per cent to a new nine-month low. ANZ and NAB declined 0.1 per cent to their weakest points since at least May. CBA remained the bank stock of choice during the turmoil, rising 0.5 per cent.
Gains in miners, tech stocks and bond proxies kept the market above water. Trade concerns have largely overshadowed an eight-day rally in iron ore, which has had scant impact on stock prices. BHP this morning rose 1.1 per cent, Rio Tinto 0.8 per cent and Fortescue 3.3 per cent. Takeover target Panoramic Resources rallied 9.6 per cent after signing a confidentiality deed to allow Independence Group to carry out due diligence.
Among tech stocks, Nearmap put on 3.6 per cent, Wisetech 2.6 per cent and Altium 2.1 per cent. Utilities ranked among the pick of the sectors as gas infrastructure group APA rose 1.9 per cent, AGL 0.4 per cent and Victorian operator AusNet 1.5 per cent. Utility software developer Gentrack sank 12.7 per cent after downgrading its revenue guidance.
Energy stocks enjoyed a strong morning after crude hit a two-month peak. Woodside rose 1.2 per cent, Santo 1.3 per cent and Origin Energy 1.4 per cent. Gains were capped by a morning drift in the price of oil. Brent crude futures were lately down 28 cents or more than 0.4 per cent at $US63.69 a barrel.
Food distributor Metcash dived 10.2 per cent after losing the contract to supply the 7-Eleven convenience store chain. At the smaller end of the market, Fiji Kava jumped 16.2 per cent after the company launched its drink offering into the US via Amazon. Wisr rose 7.4 per cent on news the consumer lender had passed a milestone by writing $150 million in loans.
What’s hot today and what’s not:
Hot today: smart light software developer Buddy Technologies surged 41.7 per cent to a 12-week high on news the company had signed its largest licensing deal to date. The company has licensed its ‘Powered by LIFX’ platform to Hong Kong firm Eastfield Lighting. The ten-year deal includes an upfront payment of $US250,000 and a fee per product for the life of the arrangement. Eastfield manufactures more than 10 million lights each year for the Chinese market.
Not today: Drugmaker Mayne Pharma slumped to a two-month low after warning shareholders at the AGM of a disappointing start to the financial year. Reported gross profit fell 33 per cent over the first four months of the year compared to the same period last year. Revenue declined 16 per cent. CEO Scott Richards attributed the result to increased competition in key products and obsolescence in some generic products. Shares were lately down 9.2 per cent.
A positive open on Asian markets saw China’s Shanghai Composite rise 0.1 per cent, Hong Kong’s Hang Seng 0.6 per cent and Japan’s Nikkei 0.8 per cent. S&P 500 index futures were recently ahead four points or more than 0.1 per cent.
Gold futures rose $1 or les than 0.1 per cent to $US1,464.60 an ounce.
On currency markets, the dollar was broadly steady at 67.92 US cents.