Strong start stunted by trade data: Aus shares 0.1% higher at noon

Market Reports

by Katrina Bullock

The Australian share market rose at the open following positive leads from Wall Street. All 3 major US indices ended the session over 7 per cent higher. The renewed positivity in the market springs from tentative signs that the coronavirus pandemic may be slowing in Europe and parts of the US. Boris Johnson remains in ICU in London as he fights his battle with COVID 19. Despite the strong start, the Australian market lost ground at 11:30 when the ABS announced that the February trade balance had fallen to around $4.4 billion.

S&P/ASX 200 index

The S&P/ASX 200 index tracking 0.1 per cent or 8 points higher at 5,294. On the futures market the SPI is 46 points higher.

Local economic news

We await the RBA’s board meeting and monetary policy decision which is expected at 2:30pm today. The Australian Bureau of Statistics has released figures on international trade in goods and services for February. In seasonally adjusted terms, the balance on goods and services was a surplus of $4,361 million in February 2020, that’s a decrease of $384 million compared to the surplus in January 2020. Data released today by the ABS shows that approximately 66 per cent of Australian businesses have reported that their turnover or cash flow has reduced as a result of COVID-19. Nearly half (47%) of Australia’s businesses made changes to their workforce arrangements as a result of COVID-19. Two in five businesses (38%) have changed how they deliver their products or services, over a third of businesses have renegotiated their lease and rental arrangements and a quarter have deferred loan repayments.

Broker moves

Citi rates ASX (ASX:ASX) as a Sell but has lifted its 12 month price target to $71.70. Volumes on the ASX surged in March to a record level in cash terms. But the broker warns that this will not continue. The broker believes ASIC's cap on volumes and the RBA's intervention into the three-year bond market will soften overall volumes, as will an April easing of volatility. Shares in ASX (ASX:ASX) are trading 1.99 per cent lower at $80.73.

Company news

The GPT Group (ASX:GPT) today announced that all properties in the GPT Wholesale Office Fund and the GPT Wholesale Shopping Centre Fund have been independently revalued as at 31 March 2020. The value of the properties was downgraded by approximately $183 million, representing a decline in book value of approximately 2 per cent. The company says the impairment “reflects the independent valuers’ assessment of the effects of COVID-19 and was largely driven by lower near-term rental growth assumptions”. Shares in GPT Group are trading 2.9 per cent higher at $3.85 at noon.

Best and worst performers

The best-performing sector is Info Tech adding 2.67 per cent, while the worst performing sector is Healthcare, shedding 2.1 per cent.

The best performing stock in the S&P/ASX 200 is Polynovo (ASX:PNV), rising 9.25 per cent to $1.83, followed by shares in Virgin Money (ASX:VUK) and Collins Foods (ASX:CKF).

The worst performing stock in the S&P/ASX 200 is Metcash (ASX:MTS),dropping 8.42 per cent to $2.72, followed by shares in Hub24 (ASX:HUB) and Estia Health (ASX:EHE).

Asian markets

Japan’s Nikkei has added 2.2 per cent, Hong Kong’s Hang Seng has gained 0.7 per cent and the Shanghai Composite has added 1.4 per cent.

Commodities and the dollar

Gold is trading at US$1,665 an ounce.
Iron ore price is flat at $83.30.
Iron ore futures are pointing to a rise of 0.1 per cent.
One Australian dollar is buying 61.20 US cents.

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