Retail results not enough to offset material losses: Aus shares close 0.8% lower

Market Reports

by Anna Napoli

Australia’s sharemarket closed lower today despite a strong performance from some of our retailers. The S&P/ASX 200 index finished 52 points down or 0.8 per cent lower at 6663. The materials sector was the worst performer today with BHP shedding almost 3 per cent dragging down the market. The biggest drop in the benchmark was QBE which shed 5.7 per cent after a UK court ruled against its business interruption policies. Going the other way, Pro Medicus surged over 11 per cent as investors mulled last week’s news of the company’s $40 million contract with Intermountain Healthcare.

Futures markets

US markets are closed for Martin Luther King Day on Monday but futures are currently lower for Tuesday's start to trading.
Dow futures are suggesting a fall of 41 points.
S&P 500 futures are eyeing a dip of 8 points.
The Nasdaq futures are eyeing a fall of 35 points.
And the ASX200 futures are eyeing a drop of 40 points tomorrow morning.



Economic news

China’s economy expanded by 2.3 per cent in 2020, rebounding from a historic contraction in the early months of the year. Gross domestic product rose 6.5 per cent in the fourth quarter from a year earlier. The results topped expectations. Economists expected China to have been the only major economy to grow last year, and predicted GDP expanded by just over 2 per cent.

IPO’s

Cancer therapy company Chimeric Therapeutics (ASX:CHM) made a solid debut on the ASX today.  It issued at 20 cents, started trading at 32 cents and closed at 40 cents. The company has just begun a phase-one clinical trial of its CAR-T therapy for recurrent glioblastoma (brain cancer) in the US.

Broker call

Citi has downgraded Beach Energy to neutral from buy. The downgrade comes on the back of analyst’s increased price expectations for crude oil and LNG. The 2021 Brent oil price forecast moved to US$59/bbl from US$52/bbl. Shares in Beach Energy (ASX:BPT) closed 2.6 per cent lower at $1.91.

Company news

Newmont Mining has engaged Alliance Aviation (ASX:AQZ) to provide air charter services to its Granites Mine in the Northern Territory for another three years. Alliance says the contract is material as it is forecast to represent between 5 per cent and 7 per cent of revenue in the next 12 months. Shares in Alliance Aviation (ASX:AQZ) closed 0.3 per cent higher at $3.83.

QBE’s share price shed almost 6 per cent today after it said it’s preparing for an extra hit of up to $US185 million in Australia after a UK appeal court’s ruling against its business interruption policies.

More positive retail news today. JB Hi-Fi’s (ASX:JBH) first half net profit has increased by 86 per cent to $318 million when compared to the year earlier period. Earnings were also higher rising 76 per cent to $463 million.

Meantime, Super Retail Group (ASX:SUL) has posted sales growth of 23 per cent and like-for-like sales growth of 24 per cent for the 26 week period ending 26 December 2020. The retailer says the
record result driven by unprecedented consumer demand throughout the period.

Best and worst performers

The best-performing sector is health care gaining 0.5 per cent while the sector trailing behind was materials dropping 1.9 per cent. The best performing stock in the S&P/ASX 200 is Pro Medicus (ASX:PME) rising 11 per cent to $42.40, followed by shares in ARB Corporation (ASX:ARB) and GUD Holdings (ASX:GUD) The worst performing stock in the S&P/ASX 200 is QBE (ASX:QBE) dropping 5.7 per cent to $8.08 , followed by shares in Alumina (ASX:AWC) and Sandfire Resources  (ASX:SFR).

Asian markets

Mixed: Japan’s Nikkei is tracking 1 per cent lower, Hong Kong’s Hang Seng is 0.4 per cent higher and the Shanghai Composite has gained 0.7 per cent.

Commodities

Gold is trading at US$1,829 an ounce.
Iron ore is steady at $169.97
Futures are suggesting a rise of 1.3 per cent.
Light crude is 53 cents lower at $50
One Australian dollar is buying 76.81 US cents.