MARKET NEWS

Rate cut expectation, Woolies lift market
25/07/2016 4:36 PM

The Australian share market has resumed its upward course, boosted by expectations of an interest rate cut, and a big lift in the shares of Woolworths after the ailing supermarket giant announced restructuring plans.

"The market is continuing to respond to an expectation of lower interest rates in Australia," CMC Markets chief market analyst Ric Spooner said.

"The market is currently pricing in around a 70 per cent probability that the Reserve Bank will cut its rate in August - whether or not that happens is going to be highly dependent on the CPI (inflation) data to be released on Wednesday."

Mr Spooner also said that very early economic data following the UK's decision to leave the European Union was not showing any major global impact from "Brexit", which was encouraging.

Mr Spooner said the third factor driving the Australian market upward was the strong improvement in the share price of Woolworths after the supermarket giant unveiled restructuring initiatives.

"The very strong recovery there (in Woolworths shares) was big enough to have an impact on the overall index," Mr Spooner said .

Woolworths surged $1.85, or 8.24 per cent, to $24.30 after it announced the axing of 500 jobs, store closures, a slowdown in the rollout of new stores, impairments, and other initiatives at a total cost of $959 million.

Rival Wesfarmers, which runs Coles, Target and Kmart, was up 45 cents at $42.25.

Among the big banks, Commonwealth Bank was up 41 cents at $77.55, Westpac added 19 cents to $30.71, ANZ put on 13 cents at $25.44, and National Australia Bank lifted 14 cents to $26.20.

In the resources sector, global miner BHP Billiton dipped six cents to $19.24 , Rio Tinto fell 21 cents to $48.14, and Fortescue Metals was steady at $4.05, due to weaker iron ore, copper and oil prices.

KEY FACTS:

* At 1625 AEST on Monday, the benchmark S&P/ASX 200 index was up 35.4 points, or 0.64 per cent, at 5, 533.6 points.

* The broader All Ordinaries index was up 33.2 points, or 0.6 per cent, at 5, 607.5 points.

* The September share price index futures contract was up 16 points at 5,483 points, with 22,414 contracts traded.

* National turnover was 2.6 billion securities traded, worth $4.5 billion.

Expected rate cut , Woolies lift market
25/07/2016 4:21 PM

The Australian share market has gone up again, boosted by expectations of an interest rate cut, and a big lift in the shares of Woolworths after the ailing supermarket giant announced restructuring plans.

At 1615 AEST on Monday, the S&P/ASX 200 index was up 35.4 points, or 0.64 per cent, at 5,533.6 points, and the All Ordinaries was up 33.2 points, or 0.6 per cent, at 5, 607.5 points.

The September share price index futures contract was up 15 points at 5,482 points with 21,186 contracts traded.

Australian stocks higher in early trade
25/07/2016 10:45 AM

The Australian share market has kicked-off the week in positive territory, led by biotechnology giant CSL, retail heavyweight Woolworths and financial stocks.

The benchmark S&P/ASX 200 index was up 0.53 per cent on Monday morning, with all 12 indexes trading in positive territory.

The local market was being led by the big end of town and was following a positive lead from Wall Street, IG market strategist Evan Lucas says.

"It's being driven mainly by defensive (stocks), big end of town, particularly the banks," he said.

In the US, all three key indexes finished stronger on Friday, with the Dow Jones Industrial Average closing up 0.29 per cent, the S&P 500 and Nasdaq gaining 0.46 per cent and 0.52 per cent, respectively.

Investors are keenly awaiting a raft of local data, including Australia's closely watched inflation figures due on Wednesday, plus the outcome of the Bank of Japan's meeting and the release of European bank stress test results, both of which are due on Friday.

CSL is the top riser among Australia's 20 biggest companies by market capitalisation, up $1.54 to $120.55.

Meanwhile, investors were probably hoping the worst is over for Woolworths, which on Monday unveiled a major strategy update, including restructuring costs of $959 million, a slowdown of its store rollout and 500 jobs losses, Mr Lucas said.

"Woolworths' news was always going to be positive from a share price perspective despite it, obviously, being negative from an internal idea," he said.

Shares in the retailer, which also operates budget department store chain Big W and liquor chain Dan Murphy's, was up $1.06 at $23.51 in early trade.

Rival Wesfarmers, which runs several chains including Coles, Target and Kmart, was up 34 cents at $42.14.

Within the local financial space, the Commonwealth Bank was up 38 cents at $77.52 and Macquarie Group had gained 30 cents to $74.10.

But resources companies lost ground due to weaker iron ore, copper and oil prices.

Newcrest was down 61 cents at $23.44, Woodside Petroleum had fallen 23 cents to $27.07 and BHP Billiton had lost 10 cents to $19.20.

However, Rio Tinto was up 11 cents at $48.46.

KEY FACTS:

* The benchmark S&P/ASX 200 index was up 29.3 points, or 0.53 per cent, at 5,527.5 at 1018 AEST.

* The broader All Ordinaries index was up 28.2 points, or 0.51 per cent, at 5,602.5 points.

* The September share price index futures contract was up 25 points at 5,492 points, with 5,467 contracts traded.

* National turnover was 499 million securities traded, worth $595.3 million.