Downer wipes down this year’s gains: Aus shares close 0.7% lower

Market Reports

by Jessica Amir

The Australian share market erased yesterday’s gains, falling 0.7 per cent with most of the sectors seeing a loss, with five sectors losing over 1 per cent and Industrials down the most after Downer (ASX:DOW) shares saw heavy selling, losing over 9 per cent, erasing most of this year’s gains.

From the get-go we did have negative leads to follow after Wall Street sank into the red as the benchmark yield for the 10-year note fell to about 2.26 per cent. That’s its lowest point in 19 months. Aside from a drop-in rates, Wall Street also saw bank shares sink after President Donald Trump said the US was “not ready” to make a deal with China, and that tariffs on Chinese imports could go up “substantially.”

Going the other way, the only sector that ended in the black was Telcos which saw a minor lift of 0.1 per cent.

At the closing bell the S&P/ASX 200 index closed 45 points lower to finish at 6,440 points.

Futures market

Dow futures are suggesting a fall of 48 points.
S&P 500 futures are eyeing a dip of 17 points.
The Nasdaq futures are eyeing a fall of 63 points.
And the ASX200 futures are eyeing a 44 point fall.

Company news

New Energy Solar (ASX:NEW) has declared a distribution of 3.90 cents per security for the six-month to 30 June 2019. The record date for determining the dividend is 28 June 2019 (Record Date) and the distribution is expected to be around 15 August 2019. The company expects to continue paying semi-annually distributions. At its AGM today NEW noted it has 13 solar plants operating and generating revenue, compared to four at the end of 2017. And as at today, Organ Church in North Carolina has come into operation and NEW is the fifth largest, listed, pure solar infrastructure company globally. Shares in New Energy Solar (ASX:NEW) closed 2.2 per cent lower at $1.33.

Downer EDI (ASX:DOW) advised as its partner for the Murra Warra wind farm project in western Victoria, Senvion GmbH, filed for self-administration (bankruptcy), it has a substantial bank guarantee from Senvion. Meantime, work is continuing to progress on site and Downer has starting having talks with Senvion’s court appointed custodian and other relevant stakeholders.

Telstra (ASX:TLS) is increasing guidance on its restructuring costs for FY19 by around $200 million due to proposed job cuts. This will result in the relevant restructuring cost being brought forward from FY20 to FY19.

The Board of the Bank of Queensland (ASX:BOQ) announced Chairman Roger Davis will retire as Chairman after the release of BOQ’s full year results in October 2019. Patrick Allaway has been appointed as Chairman Elect. Roger Davis was appointed to the Board in August 2008 and has served as Chairman since May 2013.

Best and worst performers of the day

The best performing sector was S&P/ASX Communication Services adding 0.1 per cent while the worst performing sector was S&P/ASX Industrials, shedding 1.4 per cent.

The best performing stock in the S&P/ASX 200 was Lynas Corporation (ASX:LYC), rising 15.5 per cent to close at $2.76. Shares in Ausdrill (ASX:ASL) and Domain Holdings Australia (ASX:DHG) followed higher.

The worst performing stock in the S&P/ASX 200 was Downer EDI Limited (ASX:DOW), dropping 9.1 per cent to close at $7.16. Shares in Nufarm (ASX:NUF) and Smartgroup Corporation (ASX:SIQ) followed lower.

Asian markets

Japan’s Nikkei has added 1.2 per cent, Hong Kong’s Hang Seng is steady and the Shanghai Composite has gained 0.4 per cent.

Commodities and the dollar

Gold is trading at US$1,282 an ounce.
Iron ore price rose 2.3 per cent to US$106.11
Iron ore futures are pointing to a fall of 3.2 per cent.
Light crude is US$0.43 up at US$59.06 a barrel.
One Australian dollar is buying 69.24 US cents.
 

Jessica Amir

Finance News Network
Jessica joined FNN in January 2017 after having worked in financial advising for seven years and in TV journalism for seven years, specialising in finance, equities and analysis. She has interviewed former Prime Ministers of Australia, Tony Abbott, Julia Gillard and Kevin Rudd and ex Treasurer Jo Hockey. Jessica has worked as a journalist with Sky News Business, ABC 1, ABC's The Business, ABC24 and has also been a regional Channel 7 and 9 TV reporter with Prime7 and Win News.