Australia records another current account surplus: ASX tracking 0.1% lower at noon

Market Reports

by Rachael Jones

The Australian share market saw a bit of a rollercoaster ride this morning, dipping again in mid morning trade to now be tracking 0.1 per cent lower at noon. Shares in Vicinity Centres (ASX:VCX) are down after they raised $1.2 billion in a fully underwritten placement. Meanwhile, shares in Domain Holdings (ASX:DHG) rose as did shares in Perenti Global (ASX:PRN). The Information Technology and Telcos sectors are leading the way with Consumer Staples coming in last.

The S&P/ASX 200 index is 7 points down at 5,813. On the futures market the SPI is 0.3 per cent lower.

Local economic news

Australia recorded an $8.4 billion current account surplus in the March quarter 2020, the fourth in succession, as COVID-19 effects impacted international trade. The current account surplus was driven by a trade surplus of $19.2 billion and a narrowing of the net income deficit to $10.6 billion, according to the latest information released by the Australian Bureau of Statistics (ABS).

Taxation revenue decreased 5.4% to $137.897 billion
Txpenses exceeded revenue resulting in a net operating balance of -$7.29 billion

The Reserve Bank is likely to give more details about its opposition to the use of negative rates in its monthly interest rate decision at 2:30pm later today.

Broker moves

Citi rates The Star Entertainment Group (ASX:SGR) as a Downgrade to a Neutral from a Buy. They have achieved tax certainty regarding the NSW government's gambling tax regime, moving to fixed tax rates as expected. Citi increases FY20 estimates for operating earnings by 10 per cent following the re-opening of Sydney, although acknowledges the pace of recovery remains uncertain.Target price is $3.10. Shares in The Star Entertainment Group (ASX:SGR) are 1.64 per cent up to $3.09.

Company news

Evolution Mining (ASX:EVN) has confirmed it is looking into the sale of its Cracow gold mine. They have stated that a key objective of its business strategy is to improve the quality of its asset portfolio over time. This includes continuously evaluating a wide range of acquisition and divestment opportunities that Evolution believes are in the best interests of shareholders. No agreement has been entered into at this stage regarding divestment of the asset. Shares in Evolution Mining (ASX:EVN) are currently 2.38 per cent down $6.15.

Best and worst performers

The best-performing sector is both Information Technology and Telcos gaining 0.73 per cent, while the worst performing sector is Consumer Staples losing at 0.5 per cent.

The best performing stock in the S&P/ASX 200 is Domain Holdings (ASX:DHG) rising 8.3 per cent to $3.27, followed by shares in Perenti Global (ASX:PRN) and Southern Cross Media Group (ASX:SXL).

The worst performing stock in the S&P/ASX 200 is Vicinity Centres (ASX:VCX) dropping 3.7 per cent to $1.55, followed by shares in Pro Medicus (ASX:PME) and United Malt Group (ASX:UMG).

Asian markets

Mixed: Japan’s Nikkei is up 1.03 per cent. Hong Kong’s Hang Seng has added 0.5 per cent and China’s Shanghai Composite has lost 0.1 per cent.

Commodities and the dollar

Gold is trading at US$1,740 an ounce.
Iron ore price is 1.9 per cent lower at US$100.45
Iron ore futures are flat.
One Australian dollar is buying 657.90US cents.