Afternoon trading February 19

Thanks Oscar and morning crew.


Half-time round-up:

A tentative recovery in the big banks helped the ASX rally for a third session despite some high-profile earnings misses.

The ASX 200 gained 24 points or 0.4% by mid-session, pushing back through 6100 to within reach of its highest close in four months. Prior to today, the index had been stuck in a narrow sideways trading range for seven sessions since an explosive burst higher in the first week of the month. A close around these levels would be the index's strongest since early October.

Trade on Wall Street was suspended overnight for the President's Day public holiday, leaving investors to look closer to home for market leads. The financial sector provided most of the upward momentum, rising 0.75% with the big four banks all gaining. The I.T. sector was another standout, jumping 2.6% to a six-month high after software developer Altium surged 20.2% to record levels after beating analysts' forecasts.

The health sector saw red, falling 1.1% as hearing-device maker Cochlear and vitamin supplier Blackmore's released disappointing profit updates. A warning of slowing growth in Europe and the US sent Cochlear shares down 8%. The company draws almost half its revenue from the Americas, where sales growth was a tepid 3% due to increased competition.

Blackmore's result sent shareholders rushing to the medicine cabinet. The headache for investors was the fact the company revealed an 11% slump in sales in China, its key market. The share price lost almost a third of its value before mounting a partial recovery, lately off 22.6%.

There were also headaches for investors in Coles and Seven West Media. The supermarket giant eased 2.4% after confessing sales growth at its stores tailed off towards the end of last year. And investors turned off Seven West Media after chief executive Tim Worner forecast falling ad revenue this financial year. Shares fell 8.4%.

There was better news for shareholders in financial services provider IOOF Holdings, which jumped 11.9% on optimism that the worst of the fallout from the banking Royal Commission is behind the company. Market heavyweight BHP is also due to report today but not until after the close of trade this afternoon.

The minutes from this month's Reserve Bank meeting, released this morning, showed the next interest rate move is as likely to be down as up. The board said the rate change outlook was "more evenly balanced than previously" and the economic outlook contained "significant uncertainties". While house prices were falling, the labour market remained strong and interest rates low by historic standards, cushioning the economy against a major downturn.

Asian trade was overshadowed by a renewal of hostilities between China and the US. Yesterday the Chinese government accused the US of trying to hamper Chinese technology development by warning allies against using Chinese tech because of the threat of cyber espionage. This morning China's Shanghai Composite retreated 0.15%, Hong Kong's Hang Seng 0.05% andJapan's Nikkei 0.02%. S&P 500 futures were recently ahead half a point or 0.02%.

Crude oil futures edged up 15 cents or 0.27% this morning to $US55.74 a barrel. Gold futures were sitting at $US1,327.50 an ounce. The dollar was buying 71.21 US cents.

 

 

Trading: low-key morning. Watched PM8 but held off - too many "sell the news" dives on "good" news these days. Should have been bolder with BKL. Got a pip out of the bounce in LCK but coulda, shoulda done better. Exited XTD from yesterday for brokerage. All a bit meh.