China's Manufacturing PMI causes concern: ASX closes 1.6% lower

Market Reports

by Rachael Jones

Australian shares took a dive this afternoon after China's December manufacturing report disappointed – more on this later. Commonwealth Bank (ASX:CBA) is leading the market lower with an over one per cent fall, followed by the three other major banks. All the sectors are down – with Healthcare losing the least – Energy the worst performer. At the closing bell the S&P/ASX 200 index closed 89 points lower, or 1.6 per cent lower to finish at 5,558.

Futures market

Dow futures are suggesting a fall of 164 points.
S&P 500 futures are eyeing a dip of 19 points.
The Nasdaq futures are eyeing fall of 55 points.
And the ASX200 futures are eyeing a 71 point fall tomorrow

Economic news

China’s factory activity shrunk in December – the first time in 19 months as domestic and export orders continued to weaken. The Caixin China Manufacturing PMI fell below 49.7, the mark that separates expansion from contraction, for the first time since May 2017 in December.

Company news

Director of emerging Western Australian nickel company St George Mining (ASX:SGQ) Tim Hronsky has retired as a director of the Company, effective from today. He was a founding shareholder and director of the company. John Dawson has been appointed as a non-executive director. He has over 30 years’ experience in the finance and mining sectors where he occupied very senior roles with global investment banks. Shares in St George Mining (ASX:SGQ) closed flat at $0.14.

Asset manager Pengana Capital (ASX:PCG) has proposed to establish a new unit trust in Australia to be named the Pengana Private Equity Trust (Fund), the responsible entity of which is to be Pengana Investment Management. They intend to conduct an initial public offering of ordinary fully paid units of the Fund (Units) to raise up to an indicative $1 billion.

Biotech company Starpharma (ASX:SPL) has today announced that the VivaGel® condom has received final regulatory approval and is now able to be marketed in Japan.

Remote communication and IT solutions company Speedcast International (ASX:SDA) today announced that Sebastien Lehnherr is joining the company as Chief Operating Officer.

Best and worst performers 

The sector with the least losses was Healthcare losing 0.01 per cent while the worst performing sector was Energy, shedding 2.6 per cent.

The best performing stock in the S&P/ASX 200 was Healius (ASX:HLS), rising 9.4 per cent to close at $2.44. Shares in Bellamy's (ASX:BAL) and Bravura Solutions (ASX:BVS) followed higher.

The worst performing stock in the S&P/ASX 200 was Speedcast International (ASX:SDA), dropping 5.5 per cent to close at $2.75. Shares in Infigen Energy (ASX:IFN) and Iluka Resources (ASX:ILU) followed lower.

Asian markets

Japan’s Nikkei has lost 0.3 per cent, Hong Kong’s Hang Seng has lost 2.4 per cent and the Shanghai Composite has lost 1 per cent.

Commodities and the dollar

Gold is trading at $US1,284 an ounce.
Light crude is $0.40 up at $US45.81 barrel.
One Australian dollar is buying 70.20 US cents.