Australian Securities Exchange (ASX)
People walk past the Australian Securities Exchange (ASX) building in central Sydney October 20, 2008. Reuters/Daniel Munoz
  • Local shares started a new week and month in reverse on Monday. The softer tone was a response to a similar experience in Europe and Wall Street at the weekend. US sharemarkets fell on Friday as investors booked profits for the week and month. A weaker oil price weighed on the energy sector. But a low reading for wage costs suggested that the Federal Reserve may delay hiking rates. The Dow Jones fell by 56 points or 0.3% with the S&P 50 0 down by 0.2% while the Nasdaq lost almost 0.5 points or less than 0.1%. Over the week the Dow Jones rose by 0.7% with the S&P 500 index up by 1.2% and the Nasdaq up by 0.8%. In Europe, the tone was more constructive. Shares rose on Friday in response to earnings reports and takeover speculation. The FTSEurofirst 300 rose by 0.1% with the German Dax up by 0.5% while the UK FTSE was up by 0.4%.
  • Most ASX sectors lost ground over the morning and the improvers did little to blunt the impact of sellers. As ha s been the case on numerous occasions in recent months the Materials and Energy sectors were the weak links after WTI crude oil futures fell to US$48.44 overnight and Iron ore finished at US$55.64/t (CFRChina) a loss of almost 0.5%. Another factor that worked against bulk iron ore miners was the results from the World’s largest produce Vale at the weekend. The Brazilian miner reported a 46% y/y decrease in EBITDA, as the company struggles with falling iron ore prices. Vale produced 85.3Mt of iron ore in the quarter. The company noted that 2016 guidance would be lower than the previous estimates of 376Mt, as the company cuts lower-quality ore production.
  • Argo Investments (AIO) reported a 16.5 per cent rise in annual net profit to $228.1 million which represents a record full year result driven by increased dividends and distributions from the company's investment portfolio. Total annual revenue of $241.9 million was up 14.8 per cent on the $210.7million posted in the previous year. The headline result was boosted by an $18.6 million dividend from global miner BHP Billiton's demerger of South32. Argo shares were four cents higher at $8.32.
  • Skilled Group (SKE) said it is facing a write down of up to $67.4 million in relation to its takeover by rival labour hire business Programmed Maintenance Services. It will take the form of a non-cash impairment charge to goodwill of between $57 million and $67.4 million in its results for the 2014/15 financial year. SKE recently accepted Programme’s $652 million takeover offer. The deal is expected to be wrapped up in October. SKE shares were at $1.59 a gain of 5 cents or 3%.

Tom Piotrowski - Market Analyst (Author)

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