Afternoon trading February 26

Thanks Oscar and morning crew. Big shout-out to Bugsam for his consistently brilliant pre-market reports - fabulous work.


Half-time round-up:

Aussie shares headed for their first significant setback since the start of the year as yesterday's trade-talk adrenaline hit wore off and several shares traded without their dividends.

The ASX 200 fell 70 points or 1.1% to 6117 mid-session, positioning the index for its heaviest loss since an 89-point dive on the first trading session of 2019. Since then the index has enjoyed an armchair ride amid optimism that the US and China can overcome their differences and end a damaging trade war. The index yesterday closed at its highest level since early October after US President Donald Trump tweeted that trade negotiations had made substantial progress.

However, the mood was more cautious here this morning after Wall Street's gains largely fizzled out by the end of the session as key commodities suffered a pullback. The metals & mining sector slipped 1.3% as BHP and Rio Tinto both fell more than 1%. That followed a decline in iron ore yesterday of 2.1%.

Energy stocks dropped 0.9% after a tweet from President Trump triggered a 3.1% slump in crude overnight. Trump declared petrol pump prices were too high and OPEC should do something about it. Crude has enjoyed stellar gains this year, surging 28% since bottoming out at US$43.16 a barrel in the US on Christmas Eve. West Texas Intermediate crude futures were this morning sitting at $US55.19 a barrel after rising as high as $US57.53 before the president intervened.

Wesfarmers, Alumina and IOOF Holdings dragged on the market as they traded without their dividends. Trading software supplier Iress fell 5.8% after the ASX sold its stake in the company after 19 years as a shareholder. Afterpay gave back some of yesterday's bumper gains, falling 11.4% after reporting a larger-than-expected loss of $22 million despite almost doubling income.

The best-received earnings update of the morning came from coal miner Yancoal, which rallied 12.5% after tripling its full-year net profit to $852 million. The company will return much of those profits to shareholders in the form of a special dividend.

Other companies to see solid gains after reporting this morning included Caltex, up 4.3%, and Bingo Industries, up 3.3%.

US equity futures lost ground after the Securities and Exchange Commission asked a judge to hold Tesla Chief Executive Elon Musk in contempt over a tweet about manufacturing numbers earlier this month. The SEC accused Musk of breaching a court order that all his written communications about Tesla must be pre-approved. Tesla shares sank 3.6% in after-hours trade. S&P 500 futures followed and were lately down 8.75 points or 0.3%.

China's Shanghai Composite, which yesterday welcomed its best session in three years, surging 5.6%, this morning put on another 0.3%. Elsewhere in Asia, Hong Kong's Hang Seng slipped 0.25 % andJapan's Nikkei was flat.

Gold futures were flat at $US1,329.60 an ounce. The dollar was buying 71.55 US cents.

Looking ahead to what is likely to move markets over the next 24 hours, US Federal Reserve Chair Jerome Powell is due to commence two days of testimony before Congress tonight. President Trump is due to arrive in Vietnam for two days of talks starting tomorrow with North Korean leader Kim Jong Un. And closer to home, there are earnings updates due here from Rio Tinto, Oz Minerals, Seek and Bellamy's.

 

 

Trading: caught enough of the bounce in EAR for a decent wage. Eased out of CLI from yesterday for brokerage. Wanted CNW at 3c but did not get. Feel like I should have had a few more.