Today's Ordinaries Index curve is seen at the Australian Securities Exchange (ASX) in central Sydney August 23, 2010. Australian financial markets bet on Monday that inconclusive weekend elections would deliver a change of government, ushering in a new mi
IN PHOTO: Today's Ordinaries Index curve is seen at the Australian Securities Exchange (ASX) in central Sydney August 23, 2010. Australian financial markets bet on Monday that inconclusive weekend elections would deliver a change of government, ushering in a new minority conservative administration that would scrap a planned mining tax. REUTERS/Daniel Munoz
  • Australian shares are improving for the third day although the more significant early losses are falling away at lunch. The ASX 200 Index is up 0.4 per cent, adding to Monday’s 0.25 per cent rise with financials leading the jump higher. Markets in Japan and South Korea are closed today for holidays.
  • ANZ Banking Group (ANZ) is up 3.4 per cent after beating its 1H15 earnings forecasts. Australia’s third biggest bank posted a $3.68bn half-year cash profit (~$40m above consensus). ANZ has managed to grow its revenues slightly (by 1 per cent) and keep expenses flat. WBC had its worst day of the year on Monday following after falling short of the market’s profit forecasts. WBC is slightly firmer today.
  • Upcoming ex-dividend dates for the major banks from this Friday to next Wednesday is likely to put pressure on the broader market. On Friday 8 May ANZ will trade ex-dividend while both WBC and National Bank (NAB) both trade ex-dividend on 13 May.
  • Mining stocks are the only losers at lunch with the sector down 1.3 per cent. Iron ore exports from Port Hedland to China fell to 30.1Mt in April, making it the lowest shipments since November last year. BHP’s credit rating outlook was reduced to negative by Standard & Poor’s as weaker commodity prices threatens profit growth. Despite falls in the sector today, resource companies were the best improvers on Monday, rising by 2.4 per cent.
  • Flight Centre (FLT) signed a preliminary agreement to acquire a corporate travel management business in Mexico which employs more than 100 people. No specific numbers were disclosed to the market today although FLT is up 1 per cent at lunch.
  • A $1,322m trade deficit was recorded in March marking an improvement on February but was worse than many expected. The results of a weekly consumer confidence survey showed a 2.8 per cent fall in sentiment last week. The RBA’s monthly interest rate decision at 2.30pm AEST will be in most focus this afternoon with the market pricing in a ~70 per cent chance of a rate cut today to 2 per cent.
  • Volume is above average at lunch with 837.5m shares traded worth $2.7bn. 420 stocks are up, 343 are down and 327 are unchanged.
  • US dollar strength continues to limit the AUD/USD around 0.7840 level as all eyes are on today’s RBA rate decision. The clear risk is the RBA doesn’t cut interest rates partly due to the recent lift in iron ore prices, revisions showing improving Australian labour market conditions and solid Australian housing indicators. This could push the Aussie dollar higher.
Steven Daghlian - Market Analyst (Author)
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