Market Wrap: Banks lead ASX lower

Market Reports


The Australian share market closed 0.38 per cent lower as the big four banks dragged shares lower and miners failed to hold onto early gains. 
The S&P/ASX 200 index closed 21 points down to finish at 5,433. 
 
The value of trades was $3.7 billion on volume of 649 million shares at the close of trade. The top three stocks by value were BHP Billiton Limited (ASX:BHP) ANZ Banking Group (ASX:ANZ) and Commonwealth Bank of Australia (ASX:CBA)
 
On the futures market the SPI is 21 points down.
 
Economic news

There are signs that there is a recovery in consumer confidence underway. The weekly ANZ-Roy Morgan poll has shown confidence has risen a further 2.4 per cent to 105.7. This indicates a recovery of around 6 per cent in the past month but confidence still remains about 10 per cent lower than back in April when leaks around the ‘tough’ Federal Budget began. 
 
Company news
 
Dual-listed Kathmandu Holdings Limited (ASX:KMD, NZE:KMD) has warned its full year earnings will be impacted by a recent spate of warm weather. The New Zealand-based adventure sports retailer reports sales through to the end of June have been below expectations and it now estimates EBIT to be 10 – 15 percent lower than the same 11 month period last year. CEO Peter Halkett notes the sales shortfall has been particularly significant in the past fortnight, traditionally first two weeks of Kathmandu’s winter sale promotion. The company anticipates any recovery in trading from now until the end of July will not be enough to make up the shortfall in sales to June. Shares in Kathmandu Holdings reacted sharply plunging 12.05 per cent to $2.92.
 
Bionomics Limited (ASX:BNO) has entered into exclusive collaboration and license agreement with US pharmaceutical company Merck. Under the agreement Merck will fund all research and development into the manufacture of drugs to treat Alzheimers and other central nervous system conditions. Bionomics gets an upfront payment of $21 million and can earn up to $537 million if certain milestones are reached. Bionomics will also share in royalties for any products developed. The deal is based around a Bionomic-developed chemical compound which is targeted at improving memory and learning problems with the product so far proving effective on animals.  Merck will manage the commercialisation and licensing of any proven drug advancements. Shares in Bionomics have leapt 21.84 per cent higher to $0.53.
 
Shares in department store retailer David Jones Limited (ASX:DJS) have been given a lift today on news the 17 year stoush between Solomon Lew and DJ’s suitor Woolworths Holdings could be over. The South African chain has offered $17 a share for Lew’s stake in Country Road. 
 
Fortescue Metals Group Limited (ASX:FMG) has scored conditional environmental approval for stage two of its proposed Iron Bridge magnetite project in Western Australia.
 
Telstra Corporation Limited (ASX:TLS) will team up with SNP Security to offer monitored security for business and residential customers.  
 
And SIMS Metal Management Limited (ASX:SGM) will jettison underperforming metal recycling units in the UK and Canada -  in an asset write down of up to $115 million.  
 
Best and worst performers of the day

All major sectors ended lower today. The sector with the least losses was industrials shedding 3 points to close at 4,072.The worst performing sector was health, losing 82 points to close at 14,260 points.
 
The best performing stock in the S&P/ASX 200 was Ten Network, rising 6 per cent to close at $0.27. Shares in Lynas Corp and David Jones also closed higher.
 
The worst performing stock was Kathmandu, dropping 12.05 per cent to close at $2.92. Shares in Atlas Iron and Arrium also closed lower. 
 
Commodities

Gold is trading at $US1,316 an ounce. Light crude is $0.83 up at $US107.26 a barrel. The Australian dollar is buying 94.22 US cents. 

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