ASX recoups from earlier selling as Materials muster up: ASX closes 0.9% lower

Market Reports

by Jessica Amir

The Australian share market finished 0.9 per cent lower today, recouping its earlier losses after the Materials and Staples sectors returned to positive territory.

From the outset we had negative leads as China advised it would be hitting $60 billion of tariffs on US goods from 1 June 2019.  We saw the Nasdaq lose 3.4 per cent and the Dow Jones erase over 2.4 per cent, seeing its darkest day since the trade war began in January, while the S&P 500 also lost an equal amount.

Locally, financials fell the most today, with IOOF (ASX:IFL) shares leading the decliners on the back of delays in a key purchase (touched on later in bulletin), while the National Australia Bank (ASX:NAB) shares lost 4.7 per cent after going ex-dividend, in which it's paying 83 cents fully franked.

At the closing bell the S&P/ASX 200 index closed 58 points lower to finish at 6,240.

Futures market

Dow futures are suggesting a rise of 105 points.
S&P 500 futures are eyeing a rise of 12 points.
The Nasdaq futures are eyeing a lift of 36 points.
And the ASX200 futures are eyeing a 69 point fall

Company news

UBS says IOOF Holdings' (ASX:IFL) completion delays of purchasing ANZ’s Pension and Investments (P&I) business, is impacting its earnings. UBS says APRA approvals could also add to delays and open the door to renegotiation. Meantime, UBS says after IFL and ANZ announced the coupon rate has been dropped from 14.4 per cent to 2 per cent, UBS expects IFL’s earnings will be impacted by about $14 million or by about 4.6 per cent. IFL made the announcement yesterday that it’s continuing to work with ANZ on progressing the purchase of the big four bank’s One Path P& I business. It also advised it has until 17 October 2019 to complete the outstanding conditions or IOOF or ANZ could terminate the relevant agreements. Shares in IOOF Holdings (ASX:IFL) closed 6.01 per cent lower at $5.47.

Gold mining company, Evolution Mining (ASX:EVN) highlighted its overall FY19 discovery guidance of $40-$50 million and its FY19 Group EBITDA margin of 48 per cent. EVN also has started its airborne survey on its large, early-stage gold exploration Murchison Project in Western Australia to potentially highlight ‘greenstone’ gold mineralisation deposits.

Aftermarket car parts and accessory business, Bapcor (ASX:BAP) has partnered with Greenfleet to plant native forests in Australia and also capture over 5,250 tonnes of carbon emissions, to help combat climate change and help protect our environment.

Pharmaceutical business, Mayne Pharma (ASX:MYX) has been hit by extra competition in the generic product market and its reported gross profit has fallen 20 per cent to $78.6 million, while its revenue has fallen 15 per cent to $154 milllion from January to April, both compared to the same time last year.

Automotive Holdings Group (ASX:AHG) has downgraded its FY19 NPAT guidance to be $50 million, down from its operating NPAT guidance of $52 - $56 million provided in February 2019. The downward revision comes on the back of challenging conditions and weaker than expected April performance in AHG's refrigerated logistics division amid Easter trade.

IPOs

Perpetual Credit Income Trust (ASX:PCI) stared traded today after issuing shares at $1.10, it started trading at and closed at $1.11

Best and worst performers of the day

The best performing sector was S&P/ASX Materials adding 0.2 per cent followed closely by Staples. While the worst performing sector was S&P/ASX Financials, shedding 1.8 per cent.

The best performing stock in the S&P/ASX 200 was Fortescue Metals Group (ASX:FMG), rising 7.4 per cent to close at $8.09. Shares in Evolution Mining (ASX:EVN) and Regis Resources (ASX RRL) followed higher.

The worst performing stock in the S&P/ASX 200 was Mayne Pharma Group (ASX:MYX), dropping 15 per cent to close at $0.57. Shares in Reliance Worldwide Corporation (ASX:RWC) and IOOF Holdings (ASX:IFL) followed lower.

Asian markets

Japan’s Nikkei has lost 0.8 per cent, Hong Kong’s Hang Seng has lost 1.4 per cent and the Shanghai Composite is flat, 0.03 per cent lower.

Commodities and the dollar

Gold is trading at US$1,299 an ounce.
Iron ore price fell 1.2 per cent to US$96.10
Iron ore futures are pointing to a fall of 1.5 per cent.
Light crude is US$0.79 lower at US$61.01 a barrel.
One Australian dollar is buying 69.49 US cents.