Italy and NZ PMs resign: ASX 0.78% lower at midday

Market Reports

by David Chau

The Australian share market fell at the start of trade this morning, and is still in negative territory. Around lunchtime today, it’s tracking 0.78% lower.

Throughout this morning, Australian investors engaged in broad-based selling, in response to early signals that the Italian referendum on constitutional reform was doomed to fail. And indeed, it’s now been confirmed that a large majority of Italians have voted against the reforms, and Italian Prime Minister Matteo Renzi has submitted his resignation.

Speaking of resignations, in a shock announcement, New Zealand’s Prime Minister John Key has also announced he will be stepping down. Mr Key says he is resigning because of “family reasons”.

Following these announcements, the Euro has dropped about 0.15%, and the New Zealand Dollar has fallen around 0.3% against the Australian Dollar.

The S&P/ASX 200 index is 42 points down at 5,402. On the futures market the SPI is 43 points lower.

Company news

Print and marketing communications company, IVE Group Ltd (ASX:IGL), has acquired two businesses for $116 million. Those businesses are the Franklin Printing Group Pty Ltd and AIW Printing – both of which are based in Melbourne and produce catalogues. IVE Group says these acquisitions are a strategic extension into the large format web offset sector. The company also says it’s targeting net synergies of $11.5 million each year and, after the acquisitions, its net debt will be $113.6 million. Shares in IVE Group are in a trading halt, and last traded at $2.07.

Murray Goulburn (ASX:MGC), and US company, Mead Johnson Nutrition, have mutually agreed to end negotiations in regards to an infant formula supply deal. In March 2016, the companies entered into a “framework agreement” to start up a strategic supply alliance, under which Murray Goulburn was set to invest up to $300 million to expand infant formula operations in Victoria. Despite this development, the Australian dairy giant says it will continue to explore new ways to work together with Mead Johnson. Shares in Murray Goulburn are trading up 2.11 per cent at 97 cents.

Best and worst performers

The best performing sector is Utilities, gaining 3.15 per cent to 7,494. Shares in Duet Group have risen 14.47 per cent and are trading at $2.69. Shares in AusNet Servicse and Spark Infrastructure are also stronger.

The worst performing sector is Energy, falling 1.34 per cent to 8,906. Shares in Woodside Petroleum have fallen 2.54 per cent, are trading at $30.16. Shares in Origin Energy and Oil Search are also lower.

Gold and the dollar

Gold is trading at $US1,180 an ounce.
The Australian dollar is buying $US0.7431.