Markets at a glance 16 August
Around the grounds
The local market is set to end the week on a high note amid a broad-based rally thanks to robust U.S. retail sales data. The miners are up over 2% to lead the gains, after Chinese iron ore futures recovered some of yesterday’s losses.
Banking stocks are also higher, with tech, gold and healthcare all advancing between 0.9% and 1.7%.
Energy stocks are eyeing their best week in more than a month as oil price recovered this week on stronger US economic data, moving to calm some fears the world’s largest economy was on the brink of a recession. The AXEJ index is down over 12% YTD, as of last close.
On the economic outlook locally, Reserve Bank of Australia Governor Michele Bullock has told a senate estimates hearing it is premature to be thinking about cutting interest rates, adding underlying inflation is still too high and the board remained focused on potential upside risks to prices.
In the news
National Australia bank (NAB) has reported an 8% drop in Q3 cash earnings, pressured by lower revenue and higher operating expenses. Net interest margin, a key measure of profitability, was stable in the period, with shares up over 1% in today’s trade.
Australian bourse operator, ASX Ltd (ASX) has reported a over 3% slide in underlying full year earnings, missing estimates as a rise in operating expenses more than offset growth in net interest income. Looking ahead, the exchange operator has flagged it was ‘starting to see signs of a return to IPO activity’ adding ‘more stable macro-economic conditions may be supportive of an increase in listings.’
Earlier this week, ASX was sued by ASIC for allegedly ‘misleading’ the public about the progress of a switch to a new blockchain-based clearing and settlement platform.
Shares are under pressure in today’s trade and are up 1.5% this year, as of last close.
Domain Holdings (DHG) shares are among the day’s top performers as the online property marketplace provider posted a 28% pop in FY net profit and a 13% rise in revenue. Final dividend of 4 cents per share declare, inline with last year’s payout.
The stock is down 10.4% YTD as of last close.
On the flipside, shares of 3P Learning (3PL) have sunk as the education technology developer swung to a full year net loss of AU$57 million, versus a profit of AU$6.3 million last year. The stock has dropped nearly 30% this year, as of last close.
Finally, outside of reporting season, New Zealand’s Synlait Milk (SML) and its second largest shareholder a2 Milk (A2M) have conditionally resolved disputes over exclusive manufacturing rights for some of A2M’s infant formula products.
Going global
Rounding things out, Tokyo’s Nikkei 225 has continued its march higher, headed for its best weekly gain in over four years as upbeat retail sales data in the US spurred investor confidence. MSCI’s broadest index of Asia-Pacific shares outside of Japan are also marginally higher and set to rise 1.3% for the week. US futures are back online suggested another positive session.
In currencies, the yen is languishing near a two-week low, while the Swiss franc, which also surged last week on the back of a flight to safety, remains little changed and looks set to lose 0.7% for the week. The euro continues to struggle to break above the $1.10 level against a firmer greenback and the pound is tracking higher after data showed the UK economy grew 0.6% in the second quarter, in line with market estimates.
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