Suncorp Group closed 3.8 percent lower at $ 12.98 after reporting the half year result, as investors in the company struggled to assess whether the insurer would meet its 2019 financial costs in the light of rising regulatory costs as four major natural disasters.
The Woodside Petroleum share rose 1.9 percent to $ 35.53 after the company announced a higher than expected final dividend that attempted to pay before potential imputations of dividend issues occurred. Shareholders receive a dividend of US91 ¢ for the second half, almost double the US49 ¢ paid to shareholders last year.
South32 closed 3.5 percent higher at $ 3.80 after announcing that it would increase shareholder returns through a special dividend after reporting a gain of $ US635 million in the first half.
Due to an increase in performance and management fees, the interim profit of Magellan Financial Group rose to a record high of $ 53.3 million. The company also increased its dividend from 44.5 ¢ to 73.8 ¢, raising its share 9.9% to $ 32.09.
The two largest earnings-related gains in the benchmark index were Cleanaway Waste Management, which rose 13.1 percent to $ 2.20 and Breville Group, with shares increasing 18 percent to $ 14.09. Cleanaway said it will benefit from attractive defensive fundamentals, even if the economy slows down, while Breville's profits were boosted by a growing global health and coffee craze.
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Citibank retained its sales rating on Seek, while it reduced its 12-month price target to $ 15.85 from $ 17.65, citing the slowing job market in Australia. Analyst David Kaynes also reduced his estimates for 2020-21 by 5 percent based on the fact that Australian vacancies are declining. Kaynes said job ads in Australia fell for the third consecutive month in January, with the rate of decline at the beginning of February. He believed that this trend was the beginning of a continuing downturn and given the fact that employment cycles are rarely short, to expect at least 18 months of decline. Mr. Kaynes said that the margins of Seek's international companies are insufficient to offset the profit effect of a decline in Australia. Find shares closed trading from Thursday 3.7 percent lower at $ 16.73.
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OPEC reported a decrease of 797,000 barrels per day in oil production from December to January, as the world's foremost Allied producers continue to restrict supply to raise prices. Most of the production reduction came from Saudi Arabia, which accounted for almost half of the total output reduction. Since October, the oil production of the cartel has fallen by around 1.55 million barrels per day. A large part of the decline in OPEC production is due to the countries that are exempted from spending cuts, with output from all countries, Iran, Libya and Venezuela. Without these countries, the production of OPEC has only fallen by 650,000 barrels per day.
The prices of iron ore have continued to decline as investors are waiting for confirmation from Vale about the miner's ability to supply its customers. Vale must officially cancel or change long-term contracts for iron ore contracts with its factories. "Steel mills want to draw on their iron ore deposits and then build up their stocks before looking at the overseas market," said Vivek Dhar, an analyst in mining and energy products. "We still expect the price of iron ore to rise to $ 100 per ton." Mr. Dhar also noted that the slow reaction of steel mills suggested that a peak in the iron ore price could be postponed until March.
Strong economic data pushed the US dollar higher on Wednesday, reversing a 0.4% drop in the US dollar index, ending eight consecutive earnings sessions. The actual average weekly and actual average hourly wage rose to their highest level in more than three and two years on Wednesday, respectively. The monthly headline and core inflation rates were close to the consensus, but the annual inflation print was above consensus. Due to lower energy and fuel prices the CPI dropped to 1.6 percent.
After the Reserve Bank of New Zealand policy meeting on Wednesday, Capital Economics is of the opinion that the New Zealand dollar will continue to appreciate in value against the Australian dollar until 2019. "The neutral attitude of the RBNZ was in stark contrast to the more dovish remarks from the RBA's last week's Governor and explains why the New Zealand dollar has risen against the Australian dollar after the meeting, "said Capital Economics economist Simona Gambarini in a commentary on Thursday. She said that both the Aussie and the NZ dollar would buy US60 ¢ by the end of 2019.
William graduated from UTS journalism and worked at The Sydney Morning Herald. He now discusses the markets at The Australian Financial Review and keeps a close eye on IPOs.
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