Source : THE AGE NEWS
By Staff reporters
The Australian sharemarket is still in the red, with bank and energy stocks continuing to drag the local bourse lower.
The ASX200 was 64.45 points, or 0.8 per cent lower, to 8,173.60 just after midday, in the first trading session since Labor’s landslide election win on Saturday. Five of the 11 industry sectors are in positive territory.
Wall Street’s benchmark index has had nine straight winning sessions.Credit: Bloomberg
The big banks will be in focus this week, with Westpac releasing half-year earnings on Monday morning ahead of results from NAB and ANZ later this week. CBA will release a trading update later this month.
Westpac’s half-year profits dipped 1 per cent to $3.3 billion, as the bank’s margins were squeezed by competition in the mortgage market, while it reported fewer customers were struggling to meet their repayments.
The bank on Monday said it would pay an interim dividend of 76¢ a share – the same as the second-half dividend. The bank said net interest income had fallen 2 per cent in the half, and its net interest margin – the cost of funding compared with what it charges for loans – was 2 basis points lower at 1.92 per cent.
The result is slightly weaker than analysts had expected.
Westpac shares are 2.7 per cent lower, while big four rivals NAB (down 2.2 per cent), CBA (down 2.2 per cent) and ANZ (down 0.8 per cent) are also in the red.
Energy stocks lost ground after Organisation of the Petroleum Exporting Countries (OPEC) announced an increase in output, driving oil prices lower. Woodside lost 3.1 per cent in early afternoon trade while Santos shed 2.6 per cent.
Pub and drinks giant Endeavour Group’s share price has lifted 0.7 per cent after its quarterly trading update revealed a 1.7 per cent decline in group revenue, with strength in the pubs business unable to offset the decline in retail sales.
The operator of Dan Murphy’s and BWS’ retail sales slid backwards by 3.1 per cent amid the ongoing impacts of Woolworths’ industrial strike last year that also affected Endeavour’s operations. Its hotels business recorded a 5.1 per cent uptick, with “good growth” across food, bars, gaming and accommodation.
“The ‘lack’ of any new bad news may result in a relief rally,” MST Marquee senior research analyst Craig Woolford wrote in a note. “The path to improved earnings will be bumpy, but the company is stabilising the top line and the scope for better sales and margins is meaningful over the next three years.”
Wall Street rose across the board on Friday to extend its winning streak, The rally was spurred by a better-than-expected report on the US job market and resurgent hope for a ratcheting down in the US trade showdown with China.
The S&P 500 climbed 1.5 per cent. The Dow Jones added 1.4 per cent, and the Nasdaq composite rose 1.5 per cent.
Roughly 90 per cent of stocks and every sector in the S&P 500 advanced. Technology stocks were among the companies doing the heaviest lifting. Microsoft rose 2.3 per cent and Nvidia rose 2.5 per cent. Apple, however, fell 3.7 per cent after the iPhone maker estimated that tariffs will cost it $US900 million ($1.39 billion).
Banks and other financial companies also made solid gains. JPMorgan Chase rose 2.3 per cent and Visa closed 1.5 per cent higher.
US employers added 177,000 jobs in April. That marks a slowdown in hiring from March, but it was solidly better than economists anticipated. However, the latest job figures don’t yet reflect the effects on the economy of president Donald Trump’s across-the-board tariffs against America’s trading partners. Many of the more severe tariffs that were supposed to go into effect in April were delayed by three months, with the notable exception of tariffs against China.
The S&P 500 slumped 9.1 per cent during the first week of April as Trump announced a major escalation of his trade war with more tariffs. The market has now clawed back its losses since then, helped by a string of resilient earnings reports from US companies, hopes for de-escalation of trade tensions with China and expectations that the Federal Reserve will still be able to cut rates a few times this year.
The benchmark index is still down 3.3 per cent so far this year, and 7.4 per cent below the record it reached in February.
Falling crude oil prices have weighed on the sector. Crude oil prices in the US are down about 17 per cent for the year. They fell below $US60 per barrel this week, which is a level at which many producers can no longer turn a profit.
with AP
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