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Muted leads intensify results focus

Benign international markets could see local investors focus on company results intensify. While trade fears continue to weigh and dovish central banks support, the overall market impact is muted. In overnight action the US dollar slipped, oil, base metals and gold rose and US shares and bonds edged higher. European shares moved off recent highs, but the British Pound jumped almost 1% on better wages growth.

The Australia 200 Index over the last week was dominated by earnings reports, and with BHP’s after market report yesterday and 23 of the top 200 companies reporting today the domination is likely to continue.

New Zealand companies feature this morning. The A2 Milk Company once again smashed expectations, with sales and earnings both above forecast. In contrast Spark Infrastructure and Fletcher Building missed, and may come under pressure today.

BHP showcased a solid set of numbers. However expectations were high, and a modest miss on profits combined with the dashing of possibly unrealistic expectations of capital returns may see an opening retreat from recent highs. Unfortunately for local investors many of the other results this morning are below consensus, and may see the Australia 200 index slip back below the important 6,100 mark. The bright spot is resource stocks, and Fortescue, Regis Resources and St Barbara Mines could attract investors on the back of their results.

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