A winning week for Australian stocks looked set to end with a whimper after conflicting reports over trade talks dampened buyer enthusiasm.
The ASX 200 reached mid-session eight points or 0.1 per cent in the red at 6718 after a brief opening rally faded. A finish around these levels would deliver a weekly gain of roughly 50 points.
The market struggled for traction after conflicting reports on US-China trade talks took the shine off a Wall Street rally. The S&P 500 hit a fresh record before easing to a final gain of eight points or 0.28 per cent as unnamed White House sources cast doubt on Chinese claims the two sides had agreed to a phased lifting of tariffs on each others’ goods.
A two-speed market saw a heavy fall in gold stocks and milder declines in bond proxies offset by gains in tech, energy and bank stocks. Energy was the best of the sectors after Woodside Petroleum announced the gas resource at its Scarborough field in WA was 52 per cent bigger than first thought. Woodside shares jumped 1.6 per cent to a seven-week high after CEO Peter Coleman said the increase highlighted the field’s potential as a world-class project. Santos gained 1.1 per cent and Origin Energy 1.4 per cent.
The tech sector hit a three-week peak as Xero rose 1.2 per cent to a new record a day after announcing subscribers to its online accounting platform had passed two million. Bravura Solutions rose 4.8 per cent, Appen 2.6 per cent and Afterpay 1.3 per cent. Z1P retreated 3.1 per cent, paring yesterday’s 16.9 per cent surge on news of a deal with Amazon.
The banks continued repair work following a bruising reporting season. CBA edged up 0.1 per cent, ANZ 0.5 per cent, NAB 0.3 per cent and Westpac 0.2 per cent.
Gold’s overnight plunge to a three-month low sent the local sector down 4.9 per cent to its weakest level since mid-June. The worst performers on the index were all precious metals miners: Saracen Mineral shed 8.5 per cent, Northern Star 6.9 per cent, and Resolute 6.1 per cent. Sector heavyweight Newcrest fell 4.3 per cent.
In economic news, the Reserve Bank said the economy was “coming out of a soft patch” as the global outlook improved. However, the central bank believes wages are unlikely to take off any time soon. In its quarterly policy statement, the RBA forecast anaemic annual wage growth of 2.3 per cent through to the end of next year. A separate report showed home loans – a leading indicator for housing demand – rose for a fourth straight month during September but by less than expected.
What’s hot today and what’s not:
Hot today: QuickFee’s expansion into the US gathered pace, with the company reporting it had passed a milestone with 306 US firms contracting to use the Australian invoicing platform. The company also announced record Australian lending last month of $4.2 million, an increase of 23 per cent on the same month last year. US lending of $2 million was up 133 per cent. The share price bounced 9.2 per cent to a three-week high.
Not today: News Corporation slumped to a $211 million net loss over the first quarter as currency headwinds and a sluggish property market and Australian economy took a toll. Revenues fell 7 per cent to $2.34 billion. Despite the declines, CEO Robert Thomson said the media group had made progress in getting digital platforms to pay for its content. Shares slid 5.6 per cent.
A mixed morning on Asian
markets saw China’s Shanghai Composite put on 0.4 per cent, Hong Kong’s
Hang Seng lose 0.2 per cent and Japan’s Nikkei ahead 0.5 per cent. S&P 500 index
futures were recently down six points or
0.2 per cent.
Turning to commodity markets, Brent crude futures dropped 16 cents or 0.3 per cent this morning to $US62.13 a barrel. Gold futures bounced $1.80 or 0.1 per cent to $US1,468.20 an ounce.
On currency markets, the dollar eased a fifth of a cent to 68.83 US cents.