The Australian share market dove at the open on investor concerns over the economic impact of the coronavirus outbreak. Australia’s largest trading partner, China remains in a partial travel deadlock with millions of people in quarantine. According to Bloomberg, the country which was ground zero for the outbreak has seen oil demand drop by around 20 per cent due to the virus. China is the largest importer of oil, so this drop is likely to have a disproportionate negative effect on the global market.
S&P/ASX 200 index The S&P/ASX 200 index is 114 points or 1.6 per cent lower at 6,903. On the futures market the SPI is 113 points lower.
Local economic news The number of dwellings approved rose 2.1 per cent in December 2019, in trend terms, according to data released by the Australian Bureau of Statistics today. Even with this December uptick, the number of total dwellings over the 2019 calendar year was down 19.1 per cent compared to the previous year.
Broker movesCiti has reiterated its Buy rating for Ardent Leisure Group
(ASX:ALG), but has cut its 12 month price target from $1.75 down to $1.73. The broker says that headwinds persist in the US casual dining sector. The cut comes despite Citi’s analysis that both Main Event and Dreamworld are seeing improved customer momentum; and that the entertainment sector globally is experiencing an increase in corporate interest, as reflected in the recent takeover offer for Village Roadshow. Shares in Ardent Leisure Group
(ASX:ALG) are trading 4.95 per cent lower at $1.34.
Company newsIOOF Holdings
(ASX:IFL) has completed its acquisition of the Australia & New Zealand Banking Group pensions and investments business. Back in October 2019 the company announced that the sales price of the P&I business had been reduced by $125 million, down to $825 million. IOOF CEO Renato Mota says “the acquisition of P&I will play a key role in the transformation of IOOF into Australia’s leading advice-led wealth management business. In the face of a dynamic and competitive market, scale, economic diversity and business resilience are important contributors to the success of any business transformation.” Shares in IOOF Holdings
(ASX:IFL) are trading 3.67 per cent lower at $7.62.
Best and worst performersAll of the sectors are in the red at noon. The best-performing sector, losing the least is Utilities, down 0.3 per cent, while the worst performing sector is Energy losing 3.9 per cent.
The best performing stock in the S&P/ASX 200 is Northern Star Resources
(ASX:NST) rising 2.9 per cent to $12.97, followed by shares in Evolution Mining
(ASX:EVN) and Pro Medicus
(ASX:PME).
The worst performing stock in the S&P/ASX 200 is Worley
(ASX:WOR), dropping 8.4 per cent to $13.96, followed by shares in Oil Search
(ASX:OSH) and IDP Education
(ASX:IEL).
Commodities and the dollar Gold is down 0.3 per cent trading at US$1,585 an ounce.
Iron ore price is flat at US$84.94.
Iron ore futures are pointing to a loss of 7.9 per cent.
One Australian dollar is buying 66.94 US cents.
