Key Data for the Week
Key economic data released this week:
The Australian sharemarket fell 1.9% yesterday, with all sectors closing lower. The Information Technology sector was the weakest performer, falling 5.2%.
Mining heavyweights BHP and Rio Tinto fell 3.6% and 3.5% respectively, weighing on the Materials sector. Energy stocks were mixed; Woodside Petroleum lost 1.8% and Santos slipped 2.4%, while Oil Search rose 2.9%, after the PNG Government agreed in principle to support the Papua LNG Gas agreement.
The Financials sector was dragged lower by the big four banks; Commonwealth Bank fell 0.8%, Westpac and NAB lost 1.2% and 1.3% respectively, while ANZ was the weakest performer, down 1.7%.
Wesfarmers outperformed, up 0.8%, after the Australian Competition & Consumer Commission approved its $230 million acquisition of online retailer Catch Group.
The Australian futures market points to a 1.7% fall today, being driven by weaker overseas markets.
European sharemarkets fell on Monday, with new developments in the US-China trade war weighing on the market. Mining, technology and luxury good stocks were the hardest hit. By the close of trade, the broad based STOXX Europe 600 fell 2.3%, France’s CAC 40 slipped 2.2% and the Italian FTSE MIB lost 1.3%.
US sharemarkets also closed lower overnight. China's Commerce Ministry said Chinese companies have stopped buying US agricultural products. China also allowed its currency to depreciate, a move called a "major violation" and "currency manipulation" by US President Trump. A weaker yuan serves to make Chinese goods more competitive on the global stage.
Technology stocks were the hardest hit; Apple fell 5.2%, Micron Technology slipped 4.9%, Facebook lowered 3.9%, Intel gave up 3.5% and Microsoft lost 3.4%.
Australian dwelling prices have recorded their best result since August 2011.
This confirms the two rate cuts from the RBA and clarity over housing tax policies after the Federal election have translated into a turnaround in sentiment within the housing market.
Prices in Sydney and Melbourne have increased for consecutive months, providing a clearer indication that prices have bottomed out in these two crucial property market cities.
Whether a return to the strong price growth over 2012 to 2017 is repeated is doubtful, considering slow income growth and high household debt levels will likely keep a lid on any sharp turnaround.
However, this is positive news for a sector that has been facing a few challenges of late and it will be interesting to see how the market performs in the spring selling season.
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