ASX fades after tax plan fatigue

Shares faded throughout Thursday, after investors took a breather following this week’s initial US tax cut euphoria.

Industrial, utilities and bank shares were the biggest drags on the market while a bump in oil prices lifted the energy and mining names.

At the close, the S&P/ASX200 Index and the broader All Ordinaries Index each slumped 0.2 per cent to 6060.4 points and 6156.3 points, respectively.

Many traders believe a lot of the positivity surrounding the announcement had already been priced into the market and as such, now the legislation has been passed, it was a case of selling on the news.

“For , stronger US growth and the flow on globally is positive for export demand and commodity prices and in time this will eventually flow through to stronger n growth,” said Shane Oliver, chief economist at AMP Capital.

However, we are unlikely to see a hike in interest rates anytime soon given the local economy is still lagging that of the United States’.

There was broadbased selling across the big four banks, and given they make up such a large part of the market, that weighed heavily on the entire bourse.

Commonwealth Bank of finished the day down 0.9 per cent to $79.81, ANZ was down 0.6 per cent to $28.89, National Bank slumped 0.9 per cent to $29.45 and Westpac was off 0.8 per cent to $31.18.

Oil held gains near its highest close in more than two weeks after stockpiles in the United States slipped.

The resource giants BHP Billiton and Rio Tinto finished the day up 1.4 per cent to $28.84 and up 0.9 per cent to $73.66.

Elsewhere in the market, Retail Food Group shares leapt 32.3 per cent to $2.15, with the company recouping some of the steep losses made since Fairfax Media revealed that many franchisees were struggling to survive under the company’s sharp business model, with about 200 stores currently up for sale.

RFG shocked investors on Tuesday by saying its “statutory” profit in the first-half would fall 34 per cent compared to the same period last year, to $22 million, with the news wiping $512 million from its market capitalisation, which fell from $804 million to $297 million.

AWE shares slumped 2.8 per cent to 85?? after the board recommended shareholders accept the 83?? takeover offer from Mineral Resources.

Pilbara Minerals shares fell 4.2 per cent to $1.14 after Citi downgraded the lithium miner to a “sell” citing valuation concerns.

Investors boosted BlueScope Steel shares up 4.3 per cent to $15.10 after the steel producer upgraded its full-year earnings guidance following the US tax reform announcement. Stock Watch: SKY and Space Global

Shares in this global communication infrastructure company jumped 28 per cent to 20?? on Thursday, after it signed a give-year binding network contract with African mobile payments start-up BeepTool worth around $US30 million. SKY and Space Global ran a pilot in October to test the nanosatellite system’s ability to handle financial transactions. Under the deal, BeepTool will buy “all the available communications bandwidth that is required by BeepTool to fill its commercial demand”. Sky and Space will use the BeepTool messaging app in its communications software. But the deal will only go ahead if a second field trial, on the original 3 Diamonds network, is successful. BeepTool will pay fixed payments for end user devices in advance, as well as a per usage rate for the service certain minimum usage commitment, and a security deposit covering advance services. Renewables target

is on target to meet its 2020 renewable energy target and can meet the ambitious mark of 50 per cent by 2030 if proposed projects go ahead, a report has found. November’s Renewable Energy Index report, produced by Green Energy Markets and left-wing lobbyists GetUp, finds there is almost 40,000 gigawatt hours a year worth of supply operating, under construction or under contract. That’s well above the government’s 2020 target of 30,000 GWh. If renewable projects under development are added, energy production could soar to 146,000 GWh a year by 2030 which would equate to 50 per cent of ‘s needs. US tax reform

The US Congress passed the biggest shake-up to the tax system in three decades, including slashing the corporate rate to 21 per cent, to deliver President Donald Trump the signature legislative achievement of his first year in power. Citi ???has upgraded its S&P 500 year end 2018 target to 2,800 and 25,000 for the Dow reflecting the expected impact of the US Tax reform. “While a number of our approaches suggest an even higher level for equities in 2018, sentiment indicators signal that caution is appropriate,” said Tobias Levkoich, US strategist at Citi. “We had assumed a 25 per cent tax rate in our 2018 S&P 500 forecasts but a drop to 21 per cent adds an incremental $8 to EPS.” New Zealand data

New Zealand’s economy grew faster than expected in the third quarter, sparking a rally in the local dollar, but downturns in some sectors pointed to a more muted outlook than the new government would like. Official figures out on Thursday showed a rebound in the construction sector drove gross domestic product up 0.6 per cent in the three months ending September, topping economists’ forecasts of 0.5 per cent, but falling well short of the revised 1 per cent hit the previous quarter. The announcement drove the New Zealand dollar up 0.5 per cent to US70.15??. Thursday’s GDP figures were the first since the centre-left Labour Party took office in October and suggest it may have to grapple with a slower economy next year. Gold

Gold prices have risen for a fourth straight session to reach a two-week high as US data showing solid home sales but a fall in mortgage applications pushed the dollar to a two-week low. Gains in bullion were limited, however, by a rise in US bond yields to nine- month highs after the Congress passed the country’s biggest tax overhaul in decades. A weaker US dollar makes gold cheaper for holders of other currencies, which can stimulate demand, but higher Treasury yields reduce the appeal of non- yielding bullion. Spot gold was up 0.2 per cent at $US1267 an ounce at market close on Thursday, after rising to $US1,267.81, the highest since December 6.