Australia's major stock market index, the S&P/ASX 200, managed to climb 25 points in the final hour of trading to close at 6595, a gain of 0.4 per cent. This came after higher iron ore prices in Singapore pushed BHP stocks up from $37.20 at 3.30pm to a closing price of $37.42. Similarly, Fortescue Metals Group climbed from $7.45 to $7.60 in the final hour of trading. This is the best closing price for Fortescue in nearly two weeks as it has been under pressure from falling spot iron ore prices.
Aveo Group's decision to accept a $2.195 per share from Brookfield subsidiaries sparked a massive sell-off by existing shareholders to an opportunistic hedge fund, which snapped up nearly 127 million shares at $2.12 apiece. This will give the buyer an arbitrage profit of about 3 cents per share, once a 4.5 cent dividend is taken into account.
Overall, the market spent the day finely balanced between Commonwealth Bank going ex-dividend by $2.31 and CSL posting extraordinary full-year results. CBA ended the day $2.83 lower at $76.63, taking 18.7 points off the index. Meanwhile, CSL added 24.7 points with a 6.6 per cent rise to $234 per share. This is the highest ever closing price and takes CSL's market value up to $106 billion.
Iron ore spot prices tumbled to multi-month lows on Tuesday morning, but a recovery in future prices suggests the selling may be over for the moment. Singapore futures were up 3.8 per cent on Tuesday afternoon at $US90.07 ($132.91) a tonne, near the high of $US90.25 ($133.17) set earlier in the session.
Chinese iron ore futures are up by a smaller 2.3 per cent at ￥641.5 ($133.98) a tonne. The rebound in futures coincided with the release of disappointing Chinese data, increasing speculation that policymakers will roll out additional stimulus measures to help support the economy.
“We still expect the Chinese government to achieve its 2019 growth target of 6 per cent to 6.5 per cent. However, more targeted stimulus is required in order to reach this goal,” said Kevin Xie, China economist at the Commonwealth Bank, in a note.
“We expect targeted support for infrastructure spending and consumption in the second half of 2019.”
According to Fastmarkets MB, the benchmark iron ore spot price slumped 5.2 per cent to $US131.70 a tonne, the lowest level since April 1.
Source: the Age |
