Plus   Neg

Australian Market Recovers After Weak Start

The Australian stock market recovered after a weak start on Tuesday following the modest losses overnight on Wall Street and is modestly higher as investors digested mixed corporate earnings and production results. Banks and mining stocks are among the leading gainers, offsetting weakness in the oil sector.

The benchmark S&P/ASX 200 Index is adding 6.00 points or 0.10 percent to 6,257.40, after touching a low of 6,237.60 earlier. The broader All Ordinaries Index is up 5.90 points or 0.09 percent to 6,353.80. Australian shares closed flat on Monday.

The big four banks are modestly higher. ANZ Banking, Commonwealth Bank, Westpac and National Australia Bank are up in a range of 0.1 percent to 0.4 percent.

Among the major miners, Rio Tinto is advancing more than 1 percent and Fortescue Metals is adding 0.3 percent, while BHP Group is down 0.3 percent.

Rio Tinto reported a 14 percent decline in iron ore shipments for the first quarter of 2019 due to weather disruptions by Tropical Cyclone Veronica in March and a fire at Cape Lambert A in January. The mining giant also lowered its 2019 outlook for Pilbara shipments.

Lynas Corp., which is fending off a takeover bid from conglomerate Wesfarmers, reported a more than 32 percent increase in production of rare earths oxides during the March quarter. The company's shares are rising more than 2 percent.

Oil stocks are weak after crude oil prices declined overnight. Oil Search is down 0.4 percent, Woodside Petroleum is lower by almost 1 percent and Santos is losing more than 1 percent.

Gold miners are mixed after gold prices slipped to a one-week low overnight. Newcrest Mining is higher by more than 1 percent, while Evolution Mining is lower by 0.2 percent.

Blackmores said its profit for the first nine months of the year declined 14 percent amid softening demand from China. The vitamin maker's shares are losing more than 4 percent.

On the economic front, the Reserve Bank of Australia will release the minutes from its April 2 monetary policy meeting. At the meeting, the RBA voted to maintain the cash rate at 1.50 percent - where it has remained since August 2016.

In the currency market, the Australian dollar is higher against the U.S dollar on Tuesday. The local currency was quoted at $0.7175, down from $0.7169 on Monday.

On Wall Street, stocks closed modestly lower on Monday after financial giant Goldman Sachs reported better than expected first-quarter earnings, while revenues missed expectations. Shares of Citigroup also closed just below the unchanged line even though the company reported first-quarter earnings that exceeded analyst estimates. Nonetheless, traders seemed reluctant to make more significant moves ahead of the release of quarterly results from a slew of other big-name companies in the coming days.

The Dow slipped 26.53 points or 0.1 percent to 26,384.77, the Nasdaq dipped 8.15 points or 0.1 percent to 7,976.01 and the S&P 500 edged down 1.83 points or 0.1 percent to 2,905.58.

European stocks saw modest strength on Monday, although the U.K.'s FTSE 100 Index closed just below the unchanged line. The German DAX Index and the French CAC 40 Index edged up by 0.2 percent and 0.1 percent, respectively.

Crude oil futures declined on Monday on reports Russia and OPEC might increase production to boost their market share. WTI crude futures for May ended down $0.49 or 0.8 percent at $63.40 a barrel on the New York Mercantile Exchange.

For comments and feedback contact: editorial@rttnews.com

Market Analysis

Follow RTT