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Aussie market slumps over 100 points

Aussie shares slumped to a near two-month low on Wednesday, with the ASX 200 sliding by 105.8pts or 1.6 per cent to 6606.5 due to global trade tensions, reports CommSec.

 

 The focus on Tuesday was on U.S. tensions with Brazil, Argentina and France while investor attention once again shifted to the U.S. – China dispute today.

· President Trump last night made comments implying he was willing to wait another year before signing a trade deal with China. The market has fallen as this is not reassuring considering the deadline for a phase one deal is December 15. While President Trump’s comments could simply be a bargaining tactic, markets are likely to remain sensitive to comments on trade.

· All 12 sectors lost ground on Wednesday, with 10 slumping by more than 1 per cent. Around 90 per cent of stocks on the ASX 200 finished lower, with losses from BHP, Rio Tinto (RIO) and the banks weighing most heavily. RIO flagged a US$1.5bn investment in a Utah copper mine over the next six years. · Of the 20 or so winners on the ASX 200, many were gold miners like Newcrest (NCM), Perseus (PRU) and Gold Road Resources (GOR). Despite the gains in the gold subsector, oOh!Media (OML) and Adairs (ADH) were the two real standouts on Wednesday.

· oOh!Media (OML) surged ~24 per cent after the outdoor advertiser upgraded its profit goals for the year to December 31 by 6 per cent. It now expects earnings between $138-$143m (previously $125- $135m). It attributed this to a lift in business from September.

 · Adairs (ADH) jumped ~22 per cent after announcing the ~A$75.5m purchase of online home products retailer Mocka. Mocka has been around for 12 years in Australia and New Zealand. The purchase expands ADH’s online presence and now expects internet sales to account for around 30 per cent of the group’s total revenue.

 · The Aussie economy expanded by a softer than anticipated 0.4 per cent in the September quarter (survey 0.5 per cent). Thanks to an upwardly revised read for the June quarter, this takes annual growth to 1.7 per cent. This remains below ~2 ¾ per cent trend. The Australian dollar fell following the report. Our currency jumped yesterday when RBA Governor Philip Lowe seemed a touch more upbeat about the impact of recent rate cuts on the economy. Most economists are still pencilling in a rate cut in February 2020.

 · 3bn shares were traded on Wednesday worth a well above average $8.8bn. 342 stocks rose, 800 fell and 382 finished unchanged.

 · Tonight, a report on private sector employment growth will be released in the U.S. together with international trade data and a weekly update on crude oil inventories. This can have an impact on oil prices a day out from key OPEC meetings in Vienna, Austria.

 


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