Australia Market recovers on banks, resources

Headline indices of the Australia stock market ended higher on Thursday, 28 June 2018, after recouping initial losses triggered by soft offshore lead, with shares in materials, energy, and financials being notable gainers. However, weakness in the real estate, technology, industrials, and consumer goods stocks kept the benchmark in check. At the closing bell, the benchmark S&P/ASX 200 Index advanced 19.54 points or 0.32% to 6,215.40. The broader All Ordinaries Index was up 15.31 points or 0.24% to 6,305.80.

Shares of energy players gained on the back of higher oil prices. Crude oil prices surged to highest level in three and half years overnight, after reports of drop in US crude stockpiles compounded supply worries in a market already uncertain about Libyan exports, a production disruption in Canada and Washington's demands that importers stop buying Iranian crude. US crude futures surged 3.16 per cent on Wednesday, rising as high as US$73.06 a barrel, the highest since Nov 28, 2014, on signs of tight supply.

Among Energy stocks, Woodside Petroleum, Santos and Origin Energy were higher in a range of 1% to 3%. Santos said it will resume its dividend payment policy earlier than expected, citing a favourable oil price cycle.

The major miners received a boost from recovery in base metals on the London Metal Exchange and higher iron prices in China. Shares of BHP Billiton and Rio Tinto were rising in a range of 1% to 2%, while Fortescue Metals fell 1%. Gold miners were also advancing with Northern Star up 3% and Newcrest Mining climbing 1.7%.

Financials also underpinned the bullish sentiment with all four major banks in positive territory. Among top lenders, Commonwealth Bank of Australia, ANZ Banking, National Australia Bank and Westpac were up in a range of 0.5% to 2%. AMP Ltd (AMP) was down to a fresh 15-year low with the wealth manager facing a civil claim from regulator ASIC in relation to behaviour of its authorised financial planners. The Australian Securities and Investments Commission has alleged that AMP employees advised life insurance customers to take out new policies that downgraded cover but earned higher commissions.

Real estate stocks fell, as Beijing cracks down on money flowing out of top international real estate investor China, and Australian banks restrict lending to foreign investors. Among realty stocks, Stockland Corp, Goodman Group declined in a range of 2% to 4%.

CURRENCY NEWS: The Australian dollar declined against greenback amid conflicting signals from Washington while the U.S.-China trade row deepened. The Australian dollar was trading at 73.42 US cents on Thursday, from 73.83 US cents on Wednesday.

OFFSHORE MARKET NEWS: U.S. stocks closed lower on Wall Street Wednesday, 27 June 2018, on reports that the Trump administration wasn't softening its stance on imposing limits on Chinese investments. The Dow Jones industrials fell 165 points or 0.7 percent to 24,117 and the S&P 500 slid 23 points or 0.9 percent to 2,699. The Nasdaq composite lost 116 points to 7,445, its lowest close since May 31.

Powered by Capital Market - Live News