BHP leads ASX higher
Local shares have finished the week on a solid footing. One of the encouraging aspects of the session was the recovery from a late morning slump. Thereafter the ASX 200 moved on to make new highs for the session. Over the course of the week the index rose 2% recovering the 2.2% that was surrendered in the previous week. Most sectors enjoyed buying support over the course of the day although energy names were being held back on weaker oil prices. World oil prices slumped in the last day reflecting weak European economic data and perceptions that the world was well supplied with crude. An example of the latter point being the Libyan announcement the country's largest oil export port within days. Woodside Petroleum (WPL) shares closed up 0.8%.
BHP was a factor in the improving tone over the course of the afternoon. The shares in the miner rose sharply over the afternoon after indicating a preference for spinning off more unwanted assets as it hones its portfolio to concentrate on high value commodities such as iron ore and petroleum where the majority of BHP's earnings are generated. BHP shares ended the session with a gain of 89 cents or 2.3% closing the day at $39.05.Resource stocks have been given a cold shoulder by investors, for example the materials index has fallen by the most part of 2% this month. One of the factors informing this weakness has been the continued moderation in Chinese growth as evidenced by economic data released this week
Shares in iSelect (ISU) fell 3.6% after warning of lower than expected commissions. The online-driven comparison service that compares insurance, household utilities and financial products said it had revalued the commissions received in the 2013/14 financial year. The group expects a one off after tax decline of between $11million and $14 million as a result. Commissions received arenow expected to be in the range of $16 million to $20 million. iSelect earns commissions from people who have switched health funds using its comparison website
There was no recovery for James Hardie (JHX) shares in the afternoon. The shares slumped after the maker of building products maker lowered its full-year profit expectations on the back of disappointing first-quarter profit results. JHX reported a net profit of $US28.9 million for the three months to June 30, 2014, which is down from $US142.2 million for the same period a year ago. The main driver was costs linked to asbestos-related issues. Removing these costs saw gross profit rise 11 per cent to $US140.2 million. The group expects a net profit of between $US205 million and $US235 million in the 2015 year, which is below the $226 million to $261 million range of consensus forecasts.
[Kick off your trading day with our newsletter]
More from IBT Markets:
Follow us on Facebook
Follow us on Twitter
Subscribe to get this delivered to your inbox daily