Markets Live: Retail Food Group slumps in mildly lower ASX

It seems this tariff is largely intended to cap imports. Our US economics team estimates the tariffs would only reduce the level of imports to about US$20bn, a level greater than annual imports in any year except 2017.

We think it unlikely that there will be much impact to RIO's EBITDA given it appears this tariff is to cap imports rather than reduce them.

Generally South32 sends no more than 10 per cent of its current product to the US. This percentage can vary slightly depending on regional premium and where it will place its spot product. We see minimal impact to S32.

AWC's Portland aluminium production is at breakeven. All product goes to Japan, so it should be safe from impact. Naturally there is always a risk that displaced US aluminium could adversely impact ex-US aluminium.

"I feel very comfortable about the next year or two, but in the next five years we have to build a multinational business and I didn't have those skills," he said.

"While working with Steve that became apparent and I started realising all the things I didn't know. I had to make sure we were making the big decisions now to create long-term shareholder value, while I get to do the bits I love."

"It was while we were doing the budgeting process that I could see the scale of the business as we go forward and it became clear to me that I was a product guy, and this required different skills," Mr Drury said.

Yolanda Redup reports

Elias Haddas at CBA described the threat to markets as coming from "more inward looking US trade policies leading to retaliatory protectionist trade measures from the rest of the world and potentially derailing the current synchronised expansion in global economic growth."

Against this backdrop, the heavyweight sectors of the ASX - banks and miners - were both trading down, with BHP down 1.3 per cent, Fortescue down 2.6 per cent and Westpac down 1.1 per cent.

Amid worries about the potential impact of US trade tariffs on steel and aluminium, Rio TInto lost 0.9 per cent and BlueScope Steel declined 1.7 per cent. Alumina shares were up 1.3 per cent, however.

Also on the plus side, Whitehaven Coal moved up 5.2 per cent, rebounding from last week's ex-dividend related losses, while Seek shares rose 1.5 per cent.

Myer climbed 15 per cent, while rare earths Lynas rose 5.7 per cent after reporting a profit for the first time.

Lithium players were lower, however, with Galaxy Resources down 4.5 per cent, Mineral Resources down 3.2 per cent and Pilbara Minerals down 2.6 per cent.

The standout decliner was Retail Food Group with the firm falling 36.8 per cent after trading resumed in its shares following profit and restructuring announcements on Friday.

Sources previously told Reuters that China will maintain its growth target at "around 6.5 percent".

Economists expect growth momentum to weaken this year as the government reins in corporate debt, leading to higher borrowing costs, while a war on pollution and a cooling property market will slow heavy industries and real estate investment.

Growing trade frictions with the United States have also jumped to the top of the list of risks facing China this year.

President Donald Trump announced last Thursday he would impose hefty tariffs on imported steel and aluminium to protect U.S. producers, risking retaliation from major trade partners like China, Europe and neighbouring Canada and sparking fears of a global trade war.

Li said China opposes protectionism and supports the settlement of trade disputes through negotiation, but will "resolutely safeguard" its legitimate rights and interest.

- Reuters

It plunged 50 per cent to $1.055 when the market opened at 10am, before clawing back some ground to trade down 33 per cent at 10.30am.

Also driving the share price fall was RFG's announcement on Friday that it was under pressure from its bankers after booking $138 million in writedowns.

RFG's writedowns and banking issues follow Fairfax Media reports that the group was using a brutal business model that had sent hundreds of franchisees within its network to the wall financially. The investigation also uncovered rampant underpayment of staff by store owners.

The writedowns led RFG, which also owns the Brumby's Bakeries, Michel's Patisserie and Crust Pizza chains, to a loss of $87.8 million for the first half of 2018 compared to a profit of $32.7 million in the first half of 2017.

Sarah Danckert reports

The figures, in the latest quarterly business indicators release, provide a solid underpinning for Wednesday's gross domestic product data, which economists expect will show quarterly growth of 0.5 per cent and 2.5 per cent for the year.

Rising profits buttress evidence from the recent company reporting season which showed businesses are becoming more upbeat about the outlook and figures published last week showing there has been significant lift in non-mining investment plans.

The Reserve Bank of Australia is expected to keep the official cash rate stead when its board meets on Tuesday at 1.5 per cent.

Inventories rose 0.2 per cent in the quarter and 1 per cent over 2017, the bureau said.

Gross company profits rose 2.2 per cent in the quarter, beating forecasts for a 1.5 per cent rise.

Jacob Greber reports

Lynas' flagship product is Neodymium and Praseodymium (NdPr), and production volumes were 6 per cent higher during the half.

Prices for the commodity, which is used in industrial magnets, surged 80 per cent between June 2017 and September 2017, but have since given up most of those gains.

But the twin factors of price and production ensured revenue was 75 per cent higher at $200.9 million.

The company's debt was down to $US236.5 million in January, and the company declined to pay a dividend.

Shares in Lynas surged 17¢ higher at $2.27 in early trading on Monday in the wake of the result.

The average total number of ads per week was 177,284, up a brisk 13.3 per cent compared to a year ago.

"Encouragingly, ANZ Job Ads have held on to their gain in January and, as such, a slight fall in February is not cause for concern," said David Plank, ANZ's head of Australian economics.

"Business conditions remain elevated, job security continues to improve and capacity utilisation now sits at the highest rate since 2008."

Hiring surged past all expectations in the past year, according to the official measure of employment, pulling the jobless rate down to 5.5 per cent.

Yet wage growth stayed unusually tepid at just 2.1 per cent, dragging on household incomes and consumer spending power.

- Reuters

That in turn should drive additional earnings growth to BlueScope's second-half 2018 guidance outlined on February 26 and growth in 2019.

"We have increased our already above-consensus earnings estimates on adoption of higher US spread forecasts, and expect consensus will follow suit," Credit Suisse said.

They now have a price target of $16.90 from $15.90 and have retained their outperform rating on the stock.

Shares were down 1.2 per cent at $16.11 on Monday.

In Germany, the SPD was expected to vote yes for another grand coalition, and the results confirm as such - a clear majority of 66.02 per cent.

In Italy, the most likely scenario for a hung parliament came to fruition. Dealers continue to treat the euro like hot potatoes not sure where to go given that Italian politics is headed for gridlock.

The results were initially interpreted as mildly supportive for the euro given the worst case scenario - the anti-establishment/Eurosceptic coalition in office - was averted but is reversing out the initial wave of positivity.

The market remains extremely choppy. Keep in mind upward momentum should be muted ahead of this week's European Central Bank meeting so the market will look to fade upticks given the political malaise in Italy will play on.