ASX catches a lift from Wall Street as eyes look on to the U.S and China trade progress

January 14, 2020 - 7 months ago
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The stage is set for the Australian share market to open higher after getting a ‘helping hand’ from Wall Street overnight as investors cheered the Trump administration’s decision to remove China from its list of currency manipulators ahead of Wednesday’s “Phase-One” trade deal signing ceremony.

With the so-called “Phase-One” deal baked in; China’s top trade negotiator is due to arrive in Washington on Tuesday.

The U.S. is hoping this deal will lead to a new start on trade with China, and the Trump Administration says the deal will create a level playing field for American farmers and manufacturers.

White House trade adviser Peter Navarro said the U.S. and China “Phase-One” trade deal that President Donald Trump will sign would allow the United States to swiftly reimpose tariffs if it unilaterally determines that China has broken any of its commitments.

Daily outlook on the benchmark S&P/ASX 200

Without further military action expected between the U.S. and Iran, the share market has started the week off on a subdued tone after breaking through its all-time highs on Friday.

The benchmark S&P/ASX 200 index on Monday closed at a loss of -25.3 points, or -0.37%, to 6,903.7, while the broader all ordinaries finished down 21.7 points, or 0.31 per cent, to 7,020.2 points.

Energy shares fell the most, by -1.1%, as oil prices remain under pressure after plummeting nearly -6.5% last week.

Starting with Santos, which sunk -0.56%, while Woodside lost -1.20%, Origin slipped -1.72%, and Oil Search sunk -1.89%. Meanwhile, Cooper Energy fell -3.2%.

The heavyweight mining dropped -0.3% as BHP slipped -0.9% to $39.53 and Rio Tinto dropped -0.3% to $102.08, although Fortescue gained +0.8% to $10.79.

Goldminers were mixed, with Evolution up +2.8%, while Saracen Minerals slipped -1.1%, with Resolute Mining adding +1.8% after forecasting gold production for FY20 of 500,000 ounces.

The health care sector reversed its bull course from Friday and ended being the main weight on the index.

CSL dropped -1.60%, although it’s still up a strong +6.8% this month after closing just 70 cents shy of $300 before the weekend. Today’s closed put CSL at $294.50 a share.

Cochlear also had a bumpy ride today, but closed -0.23% down, while health care providers Ramsay, Sonic, and Fisher and Paykel all slipped -0.16%, and 0.66% and -1.10% respectively.

As for our “Fab Four” (banks), they were mostly down, with ANZ slipping -0.4% to $25.01, with Westpac dripped -0.2% to $24.59, while NAB ended flat at $24.93 and Commonwealth Bank slipped two cents at $82.48.

Only the technology sector kept positive, though Xero and Computershare posted -0.27% and -0.51% losses. On the flip side, Afterpay posted a healthy gain of +4.50%, while WiseTech climbed +0.45%.

Rival Zip Co was up +3.1% after announcing customer numbers had increased +24% to 1.8 million in the December quarter, while revenue also climbed +24% to $38.5 million.

Among other ‘buy now, pay later’ companies, Humm owner FlexiGroup was up +2.3%, while Splitit dropped -0.8%, Sezzle slipped -2.2%, and Openpay gained +3.2%.

Elsewhere in the tech space, Megaport gained +5.1% to $10.72, Appen was up +3.3% to $24, and Elmo Software climbed +6.6% to $6.50.

The Property sector also displayed a firm rise of +0.1% as Charter Hall rose +1.4% and Dexus advanced +0.7%.

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