Economy in line with expectations, services sector bounces back: 3rd day of red, 0.7% lower at noon
The Aussie dollar bounces back and the Australian share market carves out its third day of negativity.
From the get-go, we had negative leads to follow after Wall Street started its first day of trade this week in the red, after being closed in the prior session for Labor day. The manufacturing sector in the US joined the rest of the world and entered contractionary territory, with the ISM reporting its first fall since early 2016. Meanwhile traders and investors came to terms with the 15 per cent US tariffs on Chinese goods that came in on the 1 September while China also imposed charges on US soybeans and on US oil.
And over in the UK, British PM Boris Johnson lost a major vote, with lawmakers voting to take control of parliament in a bid to prevent a no-deal Brexit.
Locally about 20 companies across the board are going ex-dividend. APRA has commenced a second consultation on the prudential framework for interest rate risk in the banking book (IRRBB), as well as implement the Basel standard.
The S&P/ASX 200 index is 0.7 per cent 47 points down at 6,526. On the futures market the SPI is 0.9 per cent or 58 points lower.
Local economic news
The Australian economy grew 0.5 per cent in seasonally adjusted terms in the June quarter 2019 and 1.4 per cent through the year, according to fresh figures from Australian Bureau of Statistics (ABS) today, both sets of figures were in line with GDP market expectations.
Meantime, the services sector in Australia grew, taking the sector out of contractionary phase, surprising some economists. According to AIG Group, the services sector grew by 7.5 points to 51.4 in August, after a weak month in July.
Company news
ASIC has commences proceedings against Bendigo and Adelaide Bank (ASX:BEN), in relation to a version of its unfair contract terms for its small business loan contracts. The unfair contract terms are to do with BEN’s Delphi Bank and Rural Bank brands from 2016 and June 2019. The terms and conditions appear in previous versions of small business loan contracts and the contracts were updated in July 2019, with the new Banking Code of Practice coming into force. The banks says it’s working with ASIC to reach a mutually agreeable outcome. Shares in Bendigo And Adelaide Bank (ASX:BEN)are trading 0.8 per cent lower at $10.63 at noon.
Kogan (ASX:KGN) lost Credit Suisse as a major shareholder with the major institution closing off their holding in the tech company. Last month KGN reported its gross profit rose 12 per cent and earnings (EBITDA) rose over 25 per cent in the second half of the financial year, compared to the same time last year. Kogan.com active customers grew 16 per cent year-on-year to 1.6 million to 30 June 2019. Shares in Kogan (ASX:KGN)are trading 1.9 per cent higher at $6.36 at noon.
Best and worst performers
The best-performing sector is S&P/ASX A-REIT, losing 0.2 per cent, while the worst performing sector is S&P/ASX Health Care, shedding 1.4 per cent.
The best performing stock in the S&P/ASX 200 is Metcash Limited (ASX:MTS), rising 4.2 per cent to $2.95, followed by shares in Oil Search Limited (ASX:OSH) and Northern Star Resources Ltd (ASX:NST).
The worst performing stock in the S&P/ASX 200 is CSR Limited (ASX:CSR),dropping 6.1 per cent to $3.73, followed by shares in Bravura Solutions Limited (ASX:BVS) and Emeco Holdings Limited (ASX:EHL).
Asian markets
Japan’s Nikkei has lifted by 0.04 per cent, Hong Kong’s Hang Seng has gained 1 per cent and the Shanghai Composite has lost 0.1 per cent.
Commodities and the dollar
Gold is trading at US$1,546 an ounce.
Iron ore price fell 1.6 per cent to US$89.14
Iron ore futures are pointing to a rise of 1.3 per cent.
One Australian dollar is buying 67.77 cents.
Copyright 2019 – Finance News Network
Source: Finance News Network
