Australia Market extends gains for second session

Headline indices of the Australia share market advanced for second straight session on Thursday, 08 August 2019, as investors continued hunting recently battered stocks, as investor concerns eased over the long-running US-China trade conflict. Market gains were supported by Chinese customs data reports showing a surprise jump in the country's July exports despite a protracted trade war with the United States. Most of ASX sectors inclined, with materials, healthcare and communications being notable gainers, overshadowing weakness among utilities, consumer staples and financials stocks. At closing bell, the benchmark S&P/ASX200 index advanced 48.69 points, or 0.75%, to 6,568.15. Meanwhile the broader All Ordinaries index, which tracks the nation's 500 biggest listed companies, added 53.73 points, or 0.82%, to 6,642.26.

The gains in the Australian market bolstered after Chinese customs data revealed exports for July rose unexpectedly, growing 3.3% on-year while imports for the month fell 5.6% on-year, which left China with a trade surplus of $45.06 billion.

 

Shares of materials and resources advanced despite the price of iron ore falling well below US$100/t. BHP Group (BHP) rose 1.5% while Fortescue Metals (FMG) closed 4% higher. Rio Tinto (RIO) fell 1.1% as it traded ex-dividend. Lithium miners Galaxy Resources (GXY) and Pilbara Minerals (PLS) were among the most improved on the ASX 200, jumping 10.9% and 8.2% respectively.

AGL Energy (AGL) fell 4.6% after disappointing the market with a downgrade to its underlying profit forecast for FY20. The energy provider is expecting a ~14% decline with costs of $80-$100 million from the unplanned outage of its Loy Yang plant in Victoria. Insurance Australia Group (IAG) also missed the mark with investors, falling 5% as insurance profit dropped 13% on higher claims due to natural disasters.

CURRENCY NEWS: The Australian dollar, a liquid proxy for emerging market and China risk, was firmer against greenback on Thursday, on some better than expected trade data out of China . The Australian dollar was at $0.6773 after rising from lows below $0.6720 yesterday.

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