Third quarter GDP disappointment: ASX 1.3% lower at midday

Market Reports

by Rachael Jones

The Australian share market opened lower and saw an early morning sell off. Although still lower at midday, there has been a small recovery. Now tracking 1.3 per cent lower. The Aussie dollar dropped today after the Australian Bureau of statistics released figures for the September quarter showing the economy falling below expectations. More on this later. The Utilities sector is leading the way and the Financials sector excluding REITs trailing behind. Lynas Corp (ASX:LYC) has seen a big drop this morning after authorities told the company it must remove the radioactive waste that accumulated as a result of its activities over the past six years if it wants to continue to operate in Malaysia. Seven Group Holdings (ASX:SVW) is down 7 per cent. Meanwhile Trademe Group (ASX:TME) is on the rise after receiving a second indicative proposal to acquire them.

The S&P/ASX 200 index is 76 points down at 5637. On the futures market the SPI is 71 points lower.

Local economic news

The Australian economy grew 0.3 per cent in seasonally adjusted chain volume terms in the September quarter 2018, according to figures released by the Australian Bureau of Statistics (ABS) today. This is below expectations of 0.6 per cent. ABS Chief Economist, Bruce Hockman, says: “The household sector drove domestic growth with increased consumption supported by moderate rises in household income.”

Company news

Telecommunications company Inabox (ASX:IAB) have received answers to their questions to SB&G Telecoms regarding a revised takeover proposal. SB&G Telecoms sweetened the terms of their takeover as they compete with MNF Group to acquire the company. Today SB&G reiterated that their offer is not simply a non-binding, indicative proposal. And the offer is not subject to conditions such as confirmatory due diligence or IAB Board approval; or funding. MNF Group, which owns MyNetFone, put a deal forward in October for Inabox businesses, later in November SB&G Telecoms announced an ownership of shares in Inabox and a desire to purchase more shares in the company. Shares in Inabox (ASX:IAB) last traded at $1.

Best and worst performers

The best performing sector is Utilities adding 0.7 per cent, while the worst performing sector is Financials excluding REIT shedding 1.9 per cent.

The best performing stock in the S&P/ASX 200 is Trade Me Group (ASX:TME), rising 3.3 per cent to $5.89, followed by shares in Coles Group (ASX:COL) and Northern Star Resources (ASX:NST).

The worst performing stock in the S&P/ASX 200 is Lynas Corporation (ASX:LYC), dropping 19 per cent to $1.72, followed by shares in Seven Group Holdings (ASX:SVW) and Emeco Holdings (ASX:EHL).

Commodities and the dollar

Gold is trading at US$1,236 an ounce.
Iron ore price rose 1.2 per cent to US$ 67.16 and its futures are pointing to a rise of 0.4 per cent.
One Australian dollar is buying 73.10 US cents.