The Australian share market advanced on Thursday, 14 November 2019, on speculation about another cut in interest rates after weaker than expected reading on domestic employment data. However, market gains capped amid soft Chinese economic data and on uncertainty around an anticipated initial China-US trade deal. Around late afternoon, the benchmark S&P/ASX200 index advanced 34.44 points, or 0.5%, to 6,732.80, while the broader All Ordinaries added 31.82 points, or 0.47%, to 6,837.40.
The Australian economy lost 19,000 jobs in October for the workforce's, pushing the jobless rate rose from 5.2% to 5.3%, and increasing chances of more RBA rate cuts. The number of people with full-time work fell by 10,300 and those in part-time work by 8,700, according to Thursday's data from the Australian Bureau of Statistics.
Soft Chinese economic data kept check on risk sentiments. China's industrial production, a measure of growth in sectors such as manufacturing, mining and utilities, expanded by 4.7% cent last month, down from 5.8% in September. In another piece of data released by China's National Bureau of Statistics (NBS) on Thursday, fixed asset investment, purchases of capital goods, real estate and infrastructure, grew by 5.2% in the first 10 months of the year, down from September's reading of 5.4%. Retail sales, a key metric of consumption in the world's most populous nation, grew by 7.2% in October from a year previous.
A Beijing-based think tank has become the first Chinese economic research institute linked to the government to predict that China's economic growth rate will slow below 6.0% next year. The National Institution for Finance and Development (NIFD) on Wednesday said that China's economic growth rate will slow to 5.8% in 2020 from an estimated 6.1% this year. This is at the bottom end of China's target range of 6 to 6.5% growth for 2019, and further indicates the continued downward pressure on the economy from the trade war with the United States as well as domestic headwinds.
In Sino-US trade deal, uncertainty about a potential deal between the world's two biggest economies persists as President Donald Trump failed to offer many details about the trade talks in a speech on Tuesday.
President Trump said China had agreed to buy up to $50 billion in U. S. soybeans, pork and other agricultural products annually, but China is reluctant to put a numerical commitment in the text of a potential agreement.
The dispute over farm purchases is one of several issues that have delayed completion of the limited trade accord announced by Trump and Chinese Vice Premier Liu He on Oct. 11. Both sides are also at odds over when and by how much the U. S. would agree to lift tariffs on Chinese imports. Chinese officials have also resisted U. S. demands for a strong enforcement mechanism for the deal and curbs on the forced transfer of technology for companies seeking to do business in China.
Afterpay Touch (APT) was up 7.3% after three major brokers raised their price target for the buy-now-pay-later company. APT provided a business update to the market on Wednesday which highlighted continued growth in Australia and offshore together with a partnership with eBay.
National Australia Bank (NAB) was down 3.8% as it trades ex-dividend today. NAB will pay eligible investors an 83c final dividend on December 12. It joins Westpac (WBC), ANZ Banking Group (ANZ) and Macquarie (MQG), which have all gone ex-dividend this week.
G8 Education (GEM) was down 12% after the childcare centre operator warned that due to slower growth in occupancy and spending more than predicted on wages, FY underlying EBIT is likely to be lower than anticipated. It also announced the sale of 25 centres in WA for ~$6.4m, which will be partly used to repay debt.
CURRENCY NEWS: The Australian dollar, sensitive to shifts in broader risk appetite, skidded to a one-month low against greenback, after a worryingly weak reading on employment re-ignited speculation about another cut in interest rates. The Australian dollar changed hands at $0.6801 after seeing an earlier high of $0.6841 yesterday.
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