The Australian share market finished higher on Thursday, 05 December 2019, snapping two days of losing streak, on the possibility of a trade deal between the US and China, after days of contradictory developments. Improvements were across every sector with financials, energy, tech and consumer discretionary among the biggest movers. At closing bell, the benchmark S&P/ASX200 index rose 76.44 points, or 1.16%, to 6,682.95, while the broader All Ordinaries gained 76.78 points, or 1.14%, to 6,791.15.
The market risk-on mood was fuelled by hint of progress about talks between the world's largest economies. The latest reports indicated that negotiators may be closers to an agreement on tariff relief measures that would be part of a phase one deal between the US and China and that such a deal could even happen before additional US tariffs on Chinese goods kick in on Dec. 15. The report came a day after US President Donald Trump said he wouldn't mind waiting until after the November 2020 elections for a deal.
Beyond China, US President Donald Trump has been pushing ahead on trade disputes all around the world recently. On Tuesday, he proposed tariffs on $2.4 billion in French products in retaliation for a tax on global tech giants including Google, Amazon and Facebook. That follows a threat Monday to raise tariffs on steel and aluminum from Argentina and Brazil. The trade war has hurt manufacturers and weighed on economic growth around the world. Central banks have cut interest rates and unloaded stimulus to help spur growth.
Energy stocks were boosted by a 4% lift in global oil prices ahead of meetings between major oil producing nations with production cuts likely to be extended to cap global supplies and maintain prices.
The major banks were a big contributor to broader gains.
The big four banks climbing between 1-2%. ANZ Bank was the most improved with a gain of 2.1% after the Reserve Bank of New Zealand (RBNZ) released its latest capital requirements for banks.
Afterpay (APT) rose 2.3% with the buy-now pay-later provider experiencing a solid lift in sales over November to $1 billion while sales over the Black Friday and Cyber Monday period jumped 160% compared to the year before.
Whitehaven Coal (WHC) slumped 10.3% with the coal miner providing a softer guidance update. Productivity has been hampered by a skills shortage and stoppages due to environmental disruptions at its Maules Creek operations in NSW.
ECONOMIC NEWS: Australia Trade Surplus Dips In October-- Australia's trade surplus decreased to A$4.5 billion in October from A$6.84 billion in September, according to the Australian Bureau of Statistics. Exports of goods and services decreased A$2.2 billion to A$40.75 billion. Meanwhile, imports rose slightly by A$140 million to A$36.25 billion. Retail sales remained unchanged on month in October, following a 0.2% rise in September and a 0.4% increase in August, another report showed. Clothing, footwear and personal accessory retailing and department stores sales dropped 0.8% each and household goods sales were down 0.2%. These falls were offset by a 0.4% rise in cafes, restaurants and takeaway food services and a 0.1% rise in food retailing.
CURRENCY NEWS: The Australian dollar, sensitive to shifts in broader risk appetite, declined against greenback, on underwhelming economic data with Australia's trade surplus shrinking to $4.5 billion due to a drop in iron ore exports in October. The Australian dollar changed hands at $0.6835 after bouncing from lows around $0.681 in the previous session.
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