Reliance slumps over weak demand in US: ASX 0.4% lower at noon

Market Reports

by Rachael Jones

The Australian share market dropped at the open and is now 0.4 per cent lower at noon. There were some risers today Galaxy Resources (ASX:GXY) shares rose this morning after reporting record monthly production output for April from the Mt Cattlin Project. And the Lendlease (ASX:LLC) share price shot up over 8 per cent this morning after takeover speculation. They have responded to reports... stay tuned for the latest developments. A huge loser from today is plumbing and heating company Reliance Worldwide (ASX:RWC) who saw their shares drop over fourteen per cent. Eclipx Group (ASX:ECX) also saw a drop in their shares are reporting they are selling its GraysOnline and Right2Drive businesses after flagging first-half impairments of up to $130 million.

The S&P/ASX 200 index is 24 points down at 6,287. On the futures market the SPI is 19 points lower.

Local economic news

The value of new lending commitments to households fell 3.7 per cent in March 2019, seasonally adjusted, according to the latest Australian Bureau of Statistics (ABS) figures on new lending to households and businesses. This fall follows a 2.2 per cent rise in February 2019.

Company news

Reliance Worldwide (ASX:RWC) has downgraded its EBITDA to be in the range of $260 million to $270 million instead of the previous year advised range from $280 million to $290 million. This change is due to the assumption of a modest freeze event in the US with fewer pipes bursting. It also advises the increased tariff on Chinese goods will force it to raise prices in the US and consider manufacturing in the US or another country. Shares in Reliance Worldwide (ASX:RWC) 14.1 per cent to $3.96

Lendlease (ASX:LLC) has responded to market speculation regarding potential corporate activity. The Australian newspaper reported that it was a takeover target by a major Japanese company. Lendlease confirms it has not received any such approach. Lendlease released a short statement to the ASX this morning noting the article in today’s Australian. Shares in Lendlease (ASX:LLC) are up 8.3 per cent to $13.79.

Galaxy Resources (ASX:GXY) reports that their Mt Cattlin project has delivered record monthly production output and improved final product quality for the month of April. Overall plant recovery of 61 per cent compared with an average 51 per cent reported Q1 2019 . Their customer base in China and is linked to some of the top-tier lithium supply chain end users. Shares Galaxy Resources (ASX:GXY) are up 3.1 per cent to $1.66.

Best and worst performers

The best-performing sector is REITS, adding 1.2 per cent, while the worst performing sector is Financials, shedding 1.9 per cent.

The best performing stock in the S&P/ASX 200 is Lendlease (ASX:LLC), rising 8.3 per cent to $13.79, followed by shares in Alumina (ASX:AWC) and Galaxy (ASX:GXY).

The worst performing stock in the S&P/ASX 200 is Reliance World wide (ASX:RWC),dropping 14.1 per cent to $3.96, followed by shares in Smart Group (ASX:SIQ) and ANZ (ASX:ANZ).

Asian markets

Tokyo's Nikkei is down 0.5 per cent, Hong Kong's Hang Sang is closed and China' s Shanghai Composite is down almost 1 per cent

Commodities and the dollar

Gold is trading at US$1,285 an ounce.
Iron ore price rose 2 per cent to US$97.24
Iron ore futures are pointing to a rise of 0.85 per cent.
One Australian dollar is buying 69.82 US cents.