Metcash extends losses: ASX 0.2% higher at noon

The Australian share market opened lower following weak leads from Wall Street and is now tracking 0.2 per cent higher at noon. The rebound saw rises in Saracen Mineral Holdings (ASX:SAR), and St Barbara (ASX:SBM). Meanwhile Nearmap (ASX:NEA), dropped almost 6 per cent. Metcash (ASX:MTS) shares have extended their losses from yesterday after several broker downgrades. The Materials sector is leading the way and the Utilities sector trailing behind.

The S&P/ASX 200 index is 12 points up at 6,677. On the futures market the SPI is 15 points higher.

Local economic news

The Australian Bureau of Statistics (ABS) has released its annual publication “Selected Characteristics of Australian Business 2017/18”. Statistics include 42 per cent of businesses reporting the use of cloud computing compared to 31 per cent in 2015-16. Cybersecurity was also a big topic with 54 per cent of businesses indicated cybersecurity was of some importance to their digital technologies in this report, compared to 47 per cent of businesses in 2015-16.

Broker moves

Following Metcash’s (ASX:MTS) financial results being reported yesterday, Citi has maintained its sell position in the stock, however it increased its price target by 6 per cent from $2.45 to $2.60. Citi upgraded Metcash’s earnings by 5 per cent in FY20 and 11 per cent in FY21, on the back of cost initiatives. Despite that its FY19 results missed consensus expectations by 3 per cent, with the international bank, Citi, saying Metcash’s outlook remains challenging with food competition increasing. Shares in Metcash’s (ASX:MTS) are down 4.9 per cent at $2.70.

Company news

Copper miner Sandfire Resources (ASX:SFR) is to acquire 100 per cent of MOD Resources (ASX:MOD). Sandfire (ASX:SFR) will pay 45 cents a share, valuing MOD at $167 million. MOD Resources last traded at 31 cents a share giving the copper junior a market value of $94 million. Shares in Sandfire Resources (ASX:SFR) are on a trading halt, last traded at $7.07.

Best and worst performers

The best-performing sector is Materials, adding 0.8 per cent, while the worst performing sector is Utilities, shedding 0.8 per cent.

The best performing stock in the S&P/ASX 200 is Saracen Mineral Holdings (ASX:SAR), rising 6.47 per cent to $3.87, followed by shares in St Barbara (ASX:SBM) and Resolute Mining (ASX:RSG).

The worst performing stock in the S&P/ASX 200 is Nearmap (ASX:NEA), dropping 5.8 per cent to $3.88, followed by shares in Metcash (ASX:MTS) and Pinnacle Investment Management Group (ASX:PNI).

Asian markets

Japan’s Nikkei has lost 0.1 per cent, Hong Kong’s Hang Seng has shed 0.5 per cent and the Shanghai Composite has lost 0.6 per cent.

Commodities and the dollar

Gold is trading at US$1,426 an ounce.
Iron ore price fell 0.2 per cent to US$116.77
Iron ore futures are pointing to a fall of 0.5 per cent.
One Australian dollar is buying 69.65 US cents.