Rio throws its weight, ASX down 2nd day: Aus shares close 0.6% lower

Market Reports

by Jessica Amir

The Australian stock market extended its losses, inking its second day of reversals. We fell at the open on the back of the S&P500 and the Dow losing territory on trade war worries. While our locally listed, Rio Tinto (ASX:RIO) reported their results after the market close, disappointing investors, which dragged down other large miners, including Western Areas (ASX:WSA) and Independence Group (ASX:IGO).

Not helping the cause, the iron ore price fell 2.4 per cent to $66.55, while its ore futures are pointing to a 1.2 per cent fall. Despite that, iron ore is trading near month on month highs.

Miners dragged most of the sectors down as a result, with just staples and industrials holding above water, with Wesfarmers (ASX:WES) (which makes up most of the staples index) rose 0.2 per cent

At the closing bell the S&P/ASX 200 index closed 35 points lower, or 0.56 per cent lower to finish at 6,241.

Futures market

Dow futures are suggesting a fall of 67 points.
S&P500 futures are suggesting a fall of 5.25 points.
Nasdaq futures are suggesting a fall of 17.75 points.
And the ASX200 futures are eyeing a 34 point fall.

Value of trades

$5.6 billion on volume of 677 million shares at the close of trade. The top three stocks by value were Rio Tinto (ASX:RIO), BHP Billiton Limited (ASX:BHP) and CSL (ASX:CSL).

Economic news

The market absorbed some better than expected economic news, but that failed to lift the market. Australia’s trade surplus soared $1.873 billion in June, far surpassing expectations with some economists forecasting a surplus of $900,000. It follows on the $725,000 surplus in May 2018, and $594,000 surplus balance on goods and services in April (in seasonally adjusted terms). It comes as exports (credits to Australia) jumped 3 per cent.

Company news

Abacus Property Group (ASX:ABP) advised its statutory profit will be less than last year’s result with the number coming in between $240 million and $244 million, while the same time last year it notched a statutory profit of $285.1 million. Its underlying profit is also tipped to be less than last year’s result, and should be between $181 million and $184 million for the 2018 financial year, less than the corresponding period’s result [$187 million]. Shares in Abacus Property Group (ASX:ABP) closed 0.82 per cent higher at $3.69.

The Australian government has green lighted Australia’s first research hub for medicinal agriculture at LaTrobe University. The $27 million initiative will provide evidence around the use of medical plants, including cannabis. Medical cannabis company, Cann Group (ASX:CAN) is an industry partner on the project and says it will provide an important boost for research into the development of using plants as medicine. Shares in Cann Group (ASX:CAN) closed 2.87 per cent higher at $2.87.

Rio Tinto (ASX:RIO) reported its results after the market close on Wednesday, with its half-year underlying earnings rising by 12 per cent, to US$4.4 billion for the six months ending 30 June 2018, less than the UBS forecast. As a result, its shares lost 4.9 per cent closing at $77.65.

Money3 Corporation (ASX:MNY) has upgraded its net profit after tax guidance to $32 million for the year ending 30 June 2018. The company has tipped a final dividend of at least 4.5 cents per share.

Funeral company InvoCare (ASX:IVC) has inked into two agreements to buy Grafton & District Funerals and Clarence Valley Funerals in New South Wales, which generates $2 million of revenue per annum. The proposed purchases are hoped to be completed by mid-August this year.

Best and worst performers of the day

The best performing sector was Consumer Staples, adding 0.21 per cent while the worst performing sector was Materials, shedding 2.17 per cent.

The best performing stock in the S&P/ASX 200 was Seven West Media (ASX:SWM), rising 4.17 per cent to close at $0.88. Shares in ALS (ASX:ALQ) and St Barbara (ASX:SBM) followed higher.

The worst performing stock in the S&P/ASX 200 was Western Areas (ASX:WSA), dropping 5.39 per cent to close at $3.16. Shares in Independence Group (ASX:IGO) and Rio Tinto (ASX:RIO) followed lower.

Asian markets

Lower: Japan’s Nikkei has lost 1.1 per cent, Hong Kong’s Hang Seng has lost 2.3 per cent and the Shanghai Composite has lost 2.9 per cent.

Commodities and the dollar

Gold is trading at $US1,220 an ounce.
Light crude is $0.91 down at $US67.85 barrel.
One Australian dollar is buying 73.82 US cents.


Bitcoin has gained 1.7 per cent to US$7,692, Ethereum has gained about 0.4 per cent to US$422 and EOS has fallen about 0.7 per cent to US$7.20.

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