ASX 12% away from 10-year high: Aus shares 1.6% lower at noon

Market Reports

by Jessica Amir

The Australian share market has fallen sharply, losing 1.6 per cent after Wall Street wiped out gains for the year at the end of last week’s session with the major indices falling over 2 per cent the Tech-heavy Nadsaq falling 3 per cent. 

All of our sectors are trading in the red, with miners seeing the least losses after Gold has had its best week since August on increased speculation the US Fed will slow interest rate hikes.

Over the last week the Australian dollar has been trading lower. 

Broker moves

IOOF Holdings (ASX:IFL) has been downgraded to a neutral, high-risk by Citi, from a former high-risk buy. Meantime, IOOF’s Managing Christopher Kelaher and its Chairman George Venardos stepped down in the wake of proceedings brought down by APRA. The corporate regulator is seeking to impose certain licence conditions on IOOF's APRA regulated entities and disqualification orders against a number of senior executives and its Chairman. IOOF’s proposed acquisition of ANZ’s wealth business is also now under significant threat with ANZ seeking urgent information from APRA and IOOF. All of this has taken the market by surprise and the stock has fallen about 40 per cent in the last two trading sessions. Today it’s trading 8.7 per cent lower at noon. 

The S&P/ASX 200 index is 90 points lower at 5,591, that’s 12 per cent off our 10-year high that we hit in August. On the futures market the SPI is 76 points higher.

Local economic news

Auction clearance rates were quieter week-on-week across Australia’s capital cities, with 2,614 homes being taken to auction, less than the previous weeks 2,749. Preliminary clearance results were 45 per cent, up from last week’s 41.3 per cent according to CoreLogic, while if you compared the rate to the same time last year, it was significantly higher 65.4 per cent.

And in other news home loans rose 2.2 per cent (in seasonally adjusted terms) in October, beating consensus expectations of zero growth.

Company news

Bank of Queensland (ASX:BOQ) is no longer selling its St Andrew’s Insurance arm to Freedom Insurance Group (ASX:FIG). The Bank of Queensland says it was a mutual decision as the conditions of the sale were not going to be completed within the time limits of the sale. BOQ is continuing to assess strategic options for St Andrew's. BOQ shares are trading 2.1 per cent lower at $9.54 at noon.

Australian gold company, Northern Star Resources (ASX:NST) inked a new agreement over the South Kalgoorlie Cannon Gold Mine, terminating its right-to-mine, transferring it to Southern Gold (ASX:SAU), who will assume all environment rehabilitation liabilities with the tenements. Northern Star purchased HBJ and control over the operations in March 2018, which included a 5-year right-to-mine agreement between HBJ and Southern Gold, to progress the underground development of Cannon. However, HBJ decided not to exercise the right-to-mine. Shares in Northern Star Resources (ASX:NST) are trading 3.1 per cent higher at $8.46 at noon.

Best and worst performers

The best performing sector is Materials losing 0.1 per cent, while the worst performing sector is Health Care shedding 2.8 per cent.

The best performing stock in the S&P/ASX 200 is Resolute Mining (ASX:RSG), rising 3.2 per cent to $1.04, followed by shares in Regis Resources Limited (ASX:RRL) and Northern Star Resources Ltd (ASX:NST).

The worst performing stock in the S&P/ASX 200 is IOOF Holdings Limited (ASX: IFL), dropping 8.7 per cent to $4.20, followed by shares in Emeco Holdings Limited (ASX:EHL) and Wisetech Global Limited (ASX:WTC).

Commodities and the dollar

Gold is trading at US$1,249 an ounce
Iron ore price fell 0.1 per cent to US$66.51 and its futures are pointing to a rise of 0.2 per cent.
One Australian dollar is buying 72.01 US cents.