23/06/2020 - 15:47

ASX bounces after trade deal uncertainty

23/06/2020 - 15:47

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The Australian share market has closed marginally higher after dropping and then rebounding over uncertainty about the status of the US-China trade deal.

The Australian share market has closed marginally higher after dropping and then rebounding over uncertainty about the status of the US-China trade deal.

The benchmark S&P/ASX200 index finished up 9.9 points, or 0.17 per cent, to 5,954.4, while the broader All Ordinaries closed up 11.3 points, or 0.19 per cent, to 6,069.3.

"It's been a little bit of a volatile session," said Tribeca Investment Partners lead portfolio manager Jun Bei Liu.

Shortly before lunchtime, the market plunged to be down about 1.0 per cent after US trade adviser Peter Navarro told Fox News the trade agreement with China was "over".

The turning point, he said, was the United States only learned about the coronavirus after a Chinese delegation had left Washington on January 15 after signing an interim trade deal.

But Navarro quickly walked back his comments and Donald Trump tweeted the deal with China was "fully intact".

The ASX quickly rebounded, ending the day not far from where it started for a third straight day, about 50 points under 6,000.

"The market is kind of trending sideways," Ms Liu said.

"We're really looking for more insight for what the earnings will look like, and will this be a V-shaped recovery."

While a few companies had posted better-than-expected earnings, "we need the momentum to keep going", Ms Liu said.

Harvey Norman did its part today, gaining 4.9 per cent to $4.62 after announcing its profit would be about 20 per cent higher this year.

But Woolworths dipped 0.8 per cent to $36.38 after announcing its full-year earnings could be 2.7 per cent lower amid $275 million in higher costs in the June quarter related to COVID-19 store hygiene, social distancing requirements and supply chain flexibility.

Meanwhile, Qube gained 7.8 per cent to $2.91 after the logistics company agreed to set up a major warehousing centre for Woolies at a logistics park it is developing in southwestern Sydney.

Six of the ASX's 11 official sectors were lower and the rest were higher, with consumer discretionary and property trusts the biggest gainers, both collectively rising just more than 1.0 per cent.

In the heavyweight financial sector, most of the big banks were down.

CBA and NAB both fell 0.6 per cent, to $69.03 and $18.66, respectively, while Westpac dropped 0.7 per cent to $18.14.

ANZ was the outlier, gaining 0.1 per cent to $18.98.

Challenger dropped 9.8 per cent to $4.80 after completing a $270 million capital raising at $4.89 per share.

AMP rose 7.9 per cent to $1.905 after announcing that it had received all regulatory approvals to sell its life insurance business to Resolution Life.

"It's been a long time coming so the share price has reacted positively," Ms Liu said.

Buy-now, pay-later company Flexigroup gained 9.0 per cent to $1.33 after announcing that more than two million customers had used its Humm service.

Mining giant BHP rose 0.8 per cent to $35.64, while Rio Tinto added 1.4 per cent to $98.05 and Fortescue Metals advanced 1.3 per cent to $14.01.

Goldminer Newcrest dropped 0.6 per cent, while Evolution fell 1.7 per cent and Northern Star dipped 0.9 per cent.

The Australian dollar was buying 69.09 US cents, up from 68.58 US cents at the close of trade on Monday.

ON THE ASX

* The benchmark S&P/ASX200 index closed up 9.9 points, or 0.17 per cent, at 5,945.4 points

* The All Ordinaries closed up 11.3 points, or 0.19 per cent, at 6,069.3 points

* At 1738 AEST, the SPI200 futures index was up 21 points, or 0.34 per cent, at 5,946 points

CURRENCY SNAPSHOT

One Australian dollar buys:

* 69.17 US cents, from 68.69 US cents on Friday

* 74.09 Japanese yen, from 73.46 yen

* 61.30 euro cents, from 61.35 cents

* 55.43 British pence, from 55.42 pence

* 106.71 NZ cents, from 106.74 cents.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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