ASX update: Mining's mixed fortune as market readies for RBA cut news

The Reserve Bank’s cash rate decision for August, to be delivered tomorrow, is expected to be a major driver of sentiment in the Australian stock market this week as investors prepare for the annual corporate earnings reporting season.
ASX 200_type of investment options
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The S&P/ASX200 closed last week in slightly negative territory at 6,769 points (-0.36%), despite hitting an all-time high on Tuesday, while the broader All Ordinaries lost 0.48% to 6846.

S&P and All Ords Movements (26/07/2019 to 02/08/2019)
  Closing Points % Change
S&P/ASX 200 (XJO) 6,769 -0.36%
All Ordinaries (XAO) 6,846 -0.48%
Prepared by Canstar. Points taken as of Monday open to Friday close.

A weaker performance was attributed to the United States Federal Reserve’s decision to cut interest rates for the first time in 11 years and the ongoing trade war between the US and China.

In Australia, the future of interest rates will dominate the early part of the trading week, with the RBA’s cash rate decision due tomorrow afternoon.

Most economists expect the RBA will keep the official cash rate at 1%, after delivering two rate cuts in June and July.

Capital Economics analysts said the RBA would be hoping the Australian economy soon starts to show signs of improvement.

“We expect the RBA to take a breather and leave rates on hold at 1%,” the economists said.

“Ultimately, though, we believe the RBA will be disappointed by the sustained weakness in the economy in the coming months.”

Capital Economics has forecast two more rate cuts by early next year.

Earnings season begins this week, with the Commonwealth Bank of Australia (CBA) headlining the corporate calendar.

The bank, which is the nation’s largest home lender, is expected to report an $8.8 billion net profit after tax when it releases its full year figures on Wednesday.

Transurban, Suncorp, AMP, AGL, Mirvac and insurance giant IAG will also deliver profits this week.

On the Australian market, the telco, industrials and health care sectors were some of the best-performing last week, but the broader indices were dragged down by materials, consumer discretionary and energy stocks.

Sector Movements (26/07/2019 to 02/08/2019)
  Closing Points % Change
Consumer Discretionary (XDJ) 2,590 -2.13%
Consumer Staples (XSJ) 12,423 0.34%
Energy (XEJ) 10,806 -1.83%
Financials (XFJ) 6,428 -0.48%
Health Care (XHJ) 35,821 1.85%
Industrials (XNJ) 7,088 1.86%
Information Technology (XIJ) 1,372 -1.78%
Materials (XMJ) 13,790 -2.54%
Telecommunication Service (XTJ) 1,364 2.58%
Utilities (XUJ) 8,315 -0.31%
Prepared by Canstar. Points taken as of Monday open to Friday close.

What stocks went down on the ASX last week?

 

ASX 200 – Top 5 Share Price Losses (26/07/2019 to 02/08/2019)
Rank Company Closing Share Price % Change
1 Adelaide Brighton (ABC) $3.42 -21.2%
2 CYBG (CYB) $2.87 -20.4%
3 Janus Henderson Chess Depositary Interests (JHG) $27.97 -14.8%
4 Bingo Industries (BIN) $2.33 -13.7%
5 G.U.D. Holdings (GUD) $9.21 -8.8%
Prepared by Canstar. Prices taken as of week to week close.

The prospect of an ongoing trade war between the US and China dented the fortunes of Australia’s major iron ore miners led by BHP, Fortescue Metals and Rio Tinto.

Economists have forecast a fresh round of trade tariff increases levelled by the US could further slow Chinese economic growth, which could dampen the nation’s demand to buy Australian iron ore.

BHP’s market capitalisation last week lost $5.9 billion, Fortescue dropped $2.1 billion and Rio Tinto slid $1.2 billion.

ASX 200 – Top 5 Market Capitalisation Losses (26/07/2019 to 02/08/2019)
Rank Company $ Change in Market Cap Closing Share Price % Change in Share Price
1 BHP Group (BHP) -$5,980,078,330 $38.82 -5.0%
2 Fortescue Metals Group (FMG) -$2,124,485,793 $7.60 -8.3%
3 Commonwealth Bank of Australia (CBA) -$1,380,786,815 $81.81 -0.9%
4 RIO Tinto (RIO) -$1,243,574,317 $94.91 -3.4%
5 Wesfarmers (WES) -$997,779,413 $38.86 -2.2%
Prepared by Canstar. Prices taken as of week to week close.

What stocks went up on the ASX last week?

ASX 200 – Top 5 Share Price Gains (26/07/2019 to 02/08/2019)
Rank Company Closing Share Price % Change
1 Saracen Mineral Holdings (SAR) $4.50 9.4%
2 Orica (ORI) $22.29 9.1%
3 Newcrest Mining (NCM) $36.67 8.9%
4 IPH (IPH) $8.38 8.7%
5 Resolute Mining (RSG) $1.87 7.5%
Prepared by Canstar. Prices taken as of week to week close.

On the upside, gold miner Newcrest experienced a $2.3 billion increase in its market capitalisation as its shares reached a 12 month high.

One of its joint venture partners, Encounter Resources, last week delivered a positive update on its exploration programs to the market, which analysts said helped boost Newcrest’s share price.

ASX 200 – Top 5 Market Capitalisation Gains (26/07/2019 to 02/08/2019)
Rank Company $ Change in Market Cap Closing Share Price % Change in Share Price
1 Newcrest Mining (NCM) $2,313,110,927 $36.67 8.9%
2 CSL (CSL) $2,179,596,820 $231.50 2.1%
3 Transurban Group (TLC) $1,685,437,957 $16.03 4.1%
4 Telstra Corporation (TLS) $1,486,662,232 $3.97 3.3%
5 Sydney Airport (SYD) $970,544,135 $8.65 5.2%
Prepared by Canstar. Prices taken as of week to week close.

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