Global finance ministers and central bankers also signalled over the weekend they were prepared to “act promptly” if required to shore up growth.
As the market mood improved, safe-haven gold futures struggled and Australia’s gold mining sector declined, with Newcrest Mining down 2.4 per cent at $24.90 and Evolution Mining down 3.9 per cent at $3.44.
Fund managers were also seeing some selling after updating shareholders with their progress.
Pendal shares fell 8.7 per cent to $8.49 after announcing late last week that net inflows at its Pendal Australia division reached $1.4 billion in the quarter ending March, while its JO Hambro Capital Management division saw net outflows of $1.2 billion during the three-month period. The firm also revealed that banking group Westpac intends to redeem $1.5 billion of funds under management from the Westpac legacy book in April.
Elsewhere in the sector, Perpetual shares fell 4.7 per cent to $41.15. The fund manager rallied as much as 6.2 per cent on Friday after revealing its latest fund management performance figures.
On the plus side, the banks moved higher, with Commonwealth Bank up 0.8 per cent at $72.19 and ANZ up 0.9 per cent at $26.25.A2 Milk jumped 4.1 per cent to $14.61.
Deal making provided a bit of a boost to the benchmark, with Bravura Solutions jumping 7.1 per cent to $5.77. The company made a non-binding indicative offer to buy rival GBST Holdings for $2.50 a share. GBST advised its shareholders to take no action over the offer and said its board would provide a recommendation on the offer “in due course”.
Perpetual shares dropped 4.7 per cent to $41.15 after rallying sharply on Friday after the fund manager revealed its latest performance data. Morgan Stanley’s Andrei Stadnik noted that Perpetual announced $1.9 billion of net outflows for the three months to the end of March. “The outflows came largely from Australian equities,” the analyst noted. Perpetual’s total $27.4 billion of funds under management at the end of March, implies 3 to 4 per cent downside risk to fiscal year 2020 estimated earnings, he added. “In our view, this strengthens the case for the new CEO’s strategy of looking for inorganic growth opportunities and also seeking to refresh the distribution efforts,” the analyst said.
What moved the market
Gold prices fell to a more than one-week low on Monday, with spot gold falling $US1.30 to $US1289.05 an ounce. ANZ noted that most commodity markets ended last week on a strong note after positive economic data from China and further signs of an imminent US-China trade deal. But they commented that gold came under pressure, ending with a weekly loss. “The buoyant mode in global markets crimped safe haven demand in the precious metal sector,” they said.
The Australian dollar traded at US71.72¢, moving back towards a late February high. This week will see the release of Reserve Bank minutes and jobs data for March. The labour force survey will be an important piece of data for the RBA, says Sally Auld at JPMorgan. “We forecast the unemployment rate to tick up one-tenth to 5 per cent, alongside 10,000 net employment growth and a stable participation rate of 65.6 per cent. “Our model-based estimate continues to flag only a gradual rise in the unemployment rate.”
Asian shares performed strongly on Monday, with Japan’s Nikkei 225 index jumping 1.4 per cent and China’s CSI 300 index up 0.6 per cent. US Treasury Secretary Steven Mnuchin’s comments indicating that US-China trade talks may be approaching a conclusion, together with stronger Chinese export and bank loan data, boosted sentiment across the region. MSCI’s broadest index of Asia-Pacific shares outside Japan climbed to its highest level since late July in the session, according to Reuters.
Indonesia posted a surprise trade surplus for a second straight month in March, data from the statistics bureau showed on Monday. Exports fell 10.01 per cent from a year earlier to $14.03 billion in March. Imports dropped 6.76 per cent to $13.49 billion, Reuters reported. The data emerged just days before the country heads to the polls. President Joko Widodo is expected to be returned to office comfortably on Wednesday.
Sarah Turner writes on markets and is based in our Sydney newsroom.