The Australian share market has closed slightly weaker but avoided most of the impact of an overnight fall in US tech stocks that has weighed on Asian markets.
The benchmark S&P/ASX200 index finished Tuesday day down 7.5 points, or 0.13 per cent to 5,751.9 points, while the broader All Ordinaries index was down 9.8 points, or 0.17 per cent to 5,859.1 points.
Macquarie Private Wealth division director Martin Lakos said that with the Nasdaq leading declines in the US, the absence of a large tech sector on the ASX was in Australia's favour.
"A strong day for Santos and the lack of any meaningful tech sector here has shaded local markets," Mr Lakos said.
US tech stocks were hit hard overnight with US President Donald Trump renewing criticism of Amazon.com, Facebook founder Mark Zuckerberg conceding his company may take years to recover from recent PR disasters and an ill-conceived April Fool's Day joke about bankruptcy from Tesla boss Elon Musk that helped wipe more than five per cent off his company's share price.
"In relation to the US we outperform on the downside and underperform on the upside, so to be only slightly down today is far from a disaster," Mr Lakos said
Santos shares jumped out of a trading halt by more than 20 per cent in morning trade before closing 82 cents, or 16.2 per cent higher, at $5.89 after the US private equity firm Harbour Energy raised its bid for the local energy producer a third time, to about $13.5 billion.
Following an overnight fall in Brent crude futures, the other local energy producers were mixed as oil prices edged higher on Tuesday with a possible slowdown in U.S. production offset by Russian output rising to an 11-month peak.
Woodside Petroleum was ahead 0.7 per cent to $29.45, and Oil Search retreated 1.0 per cent to $7.08.
A rally in the iron ore price helped lift BHP Billiton, up 1.8 per cent to $28.71 and Rio Tinto climbed 2.1 per cent to $74.19, but Fortescue Metals continued its recent run of losses, down 1.6 per cent, to $4.26.
Newcrest gained 45 cents, or 2.3 per cent, to $20.01 after the gold miner resumed processing at its Cadia gold mine but said it is too early to update guidance to reflect the impact of last month's tailings dam wall breach.
Shares in ANZ fell 1.2 per cent to $26.55, while Australia's other big three lenders ended between steady and 0.2 per cent lower.
A2 Milk lifted 14 cents or 1.2 per cent, to $11.60 after the milk formula producer said its China sales were unaffected by the launch of rival products from food giant Nestle.
Shares in Australia's largest telco, Telstra rose one cent, or 0.3 per cent, to $3.15 after Foxtel and Fox Sports merged into a single company two months earlier than expected.
Meanwhile, China has responded to $US50 billion worth of US tariffs with less than $US3 billion of its own.
"From a retaliatory perspective this is very measured," Mr Lakos said
The Australian dollar is back through the 77 US cent mark lifting steadily through the afternoon against a US dollar that has declined for three straight days.
National Australia Bank senior FX strategist Rodrigo Catril said a late rally by the local currency was supported by solid manufacturing data and positive European responses to the Santos takeover offer, as well as a weakening US dollar.
At 1700 AEST, the Aussie was worth 77.04 US cents, up from 76.79 US cents on Thursday.
ON THE ASX:
* The benchmark S&P/ASX200 closed down 7.5 points, or 0.13 per cent, at 5,751.9 points
* The broader All Ordinaries index was down 9.8 points, or 0.17 per cent, at 5,859.1 points
* The SPI200 futures contract was down 25 points, or 0. 44 per cent, at 5,721 points
* National turnover was 3.1 billion securities traded worth $5.9 billion
CURRENCY SNAPSHOT AT 1700 AEST:
One Australian dollar buys:
* 77.04 US cents, from 76.79 on Thursday
* 81.59 Japanese yen, from 81.76 yen
* 62.52 euro cents, from 62.24 euro cents
* 54.76 British pence, from 54.48 pence
* 106.12 NZ cents, from 106.54 cents
GOLD:
The spot price of gold in Sydney at 1700 AEST was $US1,341.108 per fine ounce, from $US1,328.10 per fine ounce on Thursday.
BOND SNAPSHOT AT 1630 AEST:
* CGS 4.50 per cent April 2020, 2.0372pct, from 2.0136pct on Thursday
* CGS 4.75pct April 2027, 2.5868pct, from 2.5789pct
Sydney Futures Exchange prices:
* June 2018 10-year bond futures contract was 97.38 (implying a yield of 2.62pct) unchanged from Thursday
* June 2018 3-year bond futures contract was 97.845 (2.155pct), from 97.860 (2.140pct).
(*Bond market closes taken at 1630 AEST previous local session; currency closes taken from 1700 AEST previous local session)
The three major U.S. stock indexes ended higher after a choppy session on Tuesday as investors looked forward to earnings season while the S&P 500 pushed above a key support level and Amazon.com shares jumped on bets that criticism from President Donald Trump would not translate to policy changes.
After a volatile session Amazon ended up being the biggest boost for Nasdaq. The White House said it wasn’t taking action even as Trump continued his attacks on the online retailer, according to a Bloomberg report.
Traders said they were heavily focused on technical levels after investors fled on Monday when the S&P 500 breached its 200-day moving average. The benchmark index pushed above that support level just ahead of the last hour of trading on Tuesday and stayed higher for the rest of the session.
“There was opportunity for sellers to break through the 200-day but that didn’t happen. Fundamentals are holding the stock market up. We’re on the verge of the earnings reporting season. That’s going to be a blockbuster,” said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama.
Wall Street analysts expect S&P 500 earnings to increase 18.4 percent for the first quarter, according to Thomson Reuters data.
The Dow Jones Industrial Average rose 389.17 points, or 1.65 percent, to 24,033.36, the S&P 500 gained 32.57 points, or 1.26 percent, to 2,614.45 and the Nasdaq Composite added 71.16 points, or 1.04 percent, to 6,941.28.
But some traders said technical sellers could still put pressure on stocks on Wednesday as the S&P’s closing level was still too close for comfort to 2590.76 - the 200-day moving average - and 2532.69 - its Feb. 9 low.
“I don’t think we’re in the clear,” said Dennis Dick, head of markets structure, proprietary trader at Bright Trading LLC in Las Vegas. “Tomorrow morning will tell us. Every time we get a good rally the sellers come in. What we need is a two-day rally with a sustained buying pressure.”
After spending the day swinging between positive and negative territory the S&P 500’s technology sector, the biggest driver in the current bull market, ended up 1 percent.
Tesla Inc shares gained 6 percent after the electric automaker said it need not raise more capital this year and announced robust production numbers for its cheaper Model 3 sedans.
Amazon.com Inc shares ended up 1.5 percent at $1,392.05 though it was still well below its March 13 record of $1,617.54.
In its high-profile market debut, digital music provider Spotify Technology SA closed at $149.01, 12.9 percent higher than the $132 reference price set by the NYSE late on Monday, though well below its intraday high of $169 and its opening price of $165.90.
Advancing issues outnumbered declining ones on the NYSE by a 2.98-to-1 ratio; on Nasdaq, a 1.86-to-1 ratio favored advancers.
The S&P 500 posted no new 52-week highs and 14 new lows; the Nasdaq Composite recorded 36 new highs and 111 new lows.
Volume on U.S. exchanges was 7.14 billion shares, compared to the 7.31 billion average for the last 20 trading days.
Source: Netwealth Morning Business Roundup
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