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ASX 200 fades in ASX afternoon

After jumping on the open, and hitting five-week highs after the first hour of trade, the ASX 200 faded as the afternoon progressed and gave up a majority of its earlier improvements, reports CommSec.

The benchmark index was up by 49 points at its best levels during the day, hitting five-week highs along the way, but ended closing 17 points or 0.25 per cent higher at 6654.9.

 The financials, materials and communications were among the main drivers of gains but losses for IT, energy and consumer staples pulled the market back.

“The energy sector was the worst performing sector as crude oil prices slid up to 3% ahead of a key meeting of OPEC and major oil producing nations as demand expectations remain weak and supply remains somewhat elevated. Woodside (WPL) was a major weight falling 2.1 per cent,” says James Tao.

 “The initial bump for stocks was on the back of a perceived defrosting of recently cooling trade relations between the US and China. Late yesterday, the Chinese authorities announced that it would exempt 16 US products from additional tariffs for 12 months.

“Then earlier this morning, US President Donald Trump tweeted he would delay the 5% tariff hike, from 25 per cent to 30 per cent, on US$250 billion of Chinese imports by a fortnight to 15 October.”

 · In company news, Wesfarmers (WES) received Federal Court approval for its proposed $776 million takeover of Kidman Resources (KDR). WES will pay KDR shareholders $1.90/share with KDR expected to be suspended from trading as of market close tomorrow. WES ended the day 0.63 per cent lower while KDR was flat.

 · In other news, NZ based energy company, Z Energy (ZEL) stumbled 10 per cent after providing an earnings downgrade for the upcoming financial year on tighter refiner and retail fuel margins. Meanwhile, NZ based dairy producer Synlait slumped 12 per cent after underwhelming investors with its FY19 profit results today.

 · The Aussie dollar remains around the best levels in six weeks buying 68.85 US cents on improved trade optimism. In the US, data on consumer prices is released with weekly data on claims for unemployment insurance and monthly budget figures.

 · Today, 3.9b units were traded worth $7.1b with 614 stocks higher, 537 weaker and 374 unchanged.

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