The Australian share market has ended Monday's session higher, ignoring soft Wall Street leads with investors finding value in the big mining companies and the nation's largest lenders.
The benchmark S&P/ASX200 closed up 17.2 points, or 0.29 per cent, at 5,886 points while the broader All Ordinaries index was up 11.6 points, or 0.19 per cent, at 5,976 points.
Macquarie Private Wealth division director Martin Lakos said the market had had "an incredibly dull day" with little conviction among traders despite mild rallies for the bluechip miners and banks.
Turnover was low, with just 2.8 billion shares changing hands during the session.
In the US on Friday, a steep slide in technology shares led the three major Wall Street indexes lower.
Mr Lakos said the two key pieces of global news - Syria on the geopolitical front and China-US trade on the economic - remain unresolved but have been factored into the market.
"To some extent we are in a status quo," he said.
Gains by the miners and the big banks led the market on Monday.
As iron ore futures rose, Rio Tinto gained $1.13, or 1.4 per cent, to $81.66 and Fortescue Metals lifted five cents, or 1.1 per cent, to $4.68.
BHP Billiton was up 37 cents, or 1.2 per cent, to $31.23, as the miner and its partners were granted 66 more days to negotiate the settlement of multi-billion dollar claims over the 2015 Samarco mine dam collapse in Brazil.
Goldminer Newcrest rose 56 cents, or 2.8 per cent, to $20.55 after securing NSW government approval to use its old Cadia Hill open pit as a tailings storage facility, fast-tracking a return to production at its key mine.
Australia's top four lenders were also higher as the banking royal commission continued to examine the financial advice industry.
National Australia Bank gained 1.4 per cent to $28.76, Commonwealth Bank lifted 0.8 per cent to $72.67, ANZ was up 0.9 per cent to $26.97 and Westpac added 0.9 per cent to $28.86
"Banks have also come off a long way and the start of the bank reporting season is coming, so there could be positioning ahead of that in two weeks time," Mr Lakos said.
The fall in AMP's shares gathered pace in afternoon trade, ending 13 cents, or 3.0 per cent lower, to $4.17, their lowest mark since July, 2012 after revelations the wealth management giant could be facing a possible class action on behalf of shareholders who have lost money on their investment.
Brambles lost 0.3 per cent to $9.61 after IMF Bentham announced a proposed class action that alleges the pallets giant knew it was incurring increased costs that made hitting its growth targets impossible.
Shares in online retailer Kogan.com fell 17.8 per cent, to $7.60 after a cash flow statement showing revenue rose about 46 per cent and gross transaction value jumped 50 per cent in the third quarter.
And iSelect shares plunged 55.5 cents, or 55.5 per cent, to a record low of 44.5 cents after the company cut its full year earnings guidance and announced the immediate resignation of chief executive Scott Wilson,
The Australian dollar has fallen slightly and was worth 76.74 US cents at 1630 AEST, from 77.09 US cents on Friday.
ON THE ASX:
* The benchmark S&P/ASX200 was up 17.2 points, or 0.29 per cent, at 5,886 points
* The broader All Ordinaries index was up 11.6 points, or 0.19 per cent, at 5,976 points
* The SPI200 futures contract was up 20 points, or 0.34 per cent, at 5,868 points.
* National turnover was 2.8 billion securities traded worth $4.6 billion.
CURRENCY SNAPSHOT AT 1700 AEST:
One Australian dollar buys:
* 76.71 US cents, from 77.09 on Friday
* 82.71 Japanese yen, from 82.91 yen
* 62.49 euro cents, from 63.01 euro cents
* 54.70 British pence, from 54.85 pence
* 106.47 NZ cents, from 106.55 cents
GOLD:
The spot price of gold in Sydney at 1700 AEST was $US1,334.769 per fine ounce, from $US1,344.50 per fine ounce on Friday.
BOND SNAPSHOT AT 1630 AEST:
* CGS 4.50 per cent April 2020, 2.1263pct, from 2.103pct on Friday
* CGS 4.75pct April 2027, 2.8276pct, from 2.773pct
Sydney Futures Exchange prices:
* June 2018 10-year bond futures contract was 97.12 (implying a yield of 2.88pct), from 97.18 (2.82pct) on Friday
* June 2018 3-year bond futures contract was 97.69 (2.31pct), from 97.730 (2.270pct)
(*Bond market closes taken at 1630 AEST previous local session; currency closes taken from 1700 AEST previous local session)
Wall Street fell into negative territory on Monday as signs of soft smartphone demand took a toll on tech stocks and a rise in bond yields dented demand for equities, offsetting optimism on earnings.
Tech stocks were a drag on all three major U.S. indexes ahead of a big week of earnings for the sector. Chipmaker shares fell after the world’s largest contract chipmaker, Taiwan Semiconductor Manufacturing Co Ltd (2330.TW), cut its full-year revenue target due to softer demand for smartphones.
Yields on 10-year U.S. Treasuries US10YT=RR rose to their highest level since January 2014 amid concerns over the growing supply of government debt and accelerating inflation.
While rising yields can lead investors away from equities, the robust earnings season gave reason for confidence.
“Earnings continue to be healthy and in many respects exceed market expectations. It continues to suggest an overall strength in the economy, and we’re seeing more and more above-trend growth,” said Steven Baffico, chief executive officer at Four Wood Capital Partners in New York.
“One good quarter does not a year make, but I think you can look at overall strength in earnings as a good leading indicator for the equity market,” said Baffico.
Analysts expect earnings growth at S&P 500 companies of nearly 20 percent in the first quarter, the strongest showing in seven years, according to Thomson Reuters data.
Quarterly results are expected this week from 181 S&P 500 companies, including technology heavy-hitters Facebook Inc (FB.O), Microsoft Corp (MSFT.O), Amazon.com Inc (AMZN.O) and Intel Corp (INTC.O). Alphabet Inc (GOOGL.O) reports after the market closes on Monday.
Alphabet is expected to post first-quarter adjusted earnings per share of $9.28. Heightened options activity ahead of Alphabet’s report implied a 4.9 percent stock price swing in either direction by Friday.
At 3:13PM ET, the Dow Jones Industrial Average .DJI fell 58.33 points, or 0.24 percent, to 24,404.61, the S&P 500 .SPX lost 4.48 points, or 0.17 percent, to 2,665.66, and the Nasdaq Composite .IXIC dropped 27.71 points, or 0.39 percent, to 7,118.42.
Of the 11 major S&P sectors only telecom .SPLRCL and healthcare .SPXHC were in positive territory.
The Philadelphia Semiconductor index .SOX was down 1.2 percent and was on track for its fourth straight session of declines on concerns of slowing smartphone demand.
Merck & Co Inc (MRK.N) helped lift the healthcare sector, up 2.3 percent following a Goldman Sachs upgrade to “buy.” {nL3N1S051J]
Aluminum company stocks dropped as the United States opened the door to sanctions relief for Russian aluminum giant United Company Rusal Plc (0486.HK). Alcoa (AA.N) tumbled 13.9 percent and Arconic fell (ARNC.N) 4.8 percent, making it the biggest percentage loser on the S&P.
Declining issues outnumbered advancing ones on the NYSE by a 1.88-to-1 ratio; on Nasdaq, a 1.81-to-1 ratio favored decliners.
Source: Netwealth Morning Business Roundup
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