Thanks Beany and morning regulars. Half-time round-up: Shares...

Thanks Beany and morning regulars.


Half-time round-up:

Shares shook off early losses as speculation about another rate cut next week helped offset a profit downgrade from Woolworths and weakness in energy stocks.

At lunchtime the ASX 200 was seven points or 0.1% ahead at 5915 after earlier falling as low as 5875 as traders punished WOW's earnings amendment by pushing the shares down more than 9%. The supermarket giant cut its full-year net profit growth to 1.8% from a previous target of 4-7%.

WOW's woes dragged the consumer staples sector down 5%. Energy -0.6% was also weak. Gold +2.2%, IT +1.5%, industrials +1.2%, health +1.2%, financials +0.4% and metals & mining +0.1% helped redress the balance.

The mid-morning reversal came as analysts tipped a rate cut next week following yesterday's soft capital spending data.

"Previously, we had expected the [Reserve] Bank to wait until May before lowering the cash rate again... but we now think the RBA will be more inclined to front-load the additional policy stimulus, rather than wait for more information, as we had expected previously," JPMorgan economist Stephen Walters told Fairfax. "Yesterday’s stinker of a business investment survey, which we had flagged as an important signpost for policy, and which showed no medium term rotation in the sources of investment spending away from mining, was the swing factor on our change of call. Worryingly, on yesterday’s evidence, corporate 'animal spirits' remain in very short supply."


Major Asian markets were positive. China's Shanghai Composite gained 0.34%, Hong Kong's Hang Seng 0.17% and Japan's Nikkei 0.26%. Dow futures were recently down 28 points or 0.15%.

Crude oil futures bounced 71 cents this morning to US$48.88 a barrel. Spot gold was off 40 cents at US$1.209.70 an ounce. The dollar was buying 77.97 US cents.


The market is on track for a sixth straight winning week. The gains may have slowed over the last two weeks but the trend remains positive. Trading: seemed to be plenty happening this morning, but every time I placed an order the market took off without me. Eventually got half a wage out of OCC but should have done much, much better.