The Australian share market opened lower as expected following more negative leads from Wall Street. It comes as the Dow Jones briefly fell over 400 points on the long term, 10-year Treasury note yield hitting the lowest level seen since September 2017 before rebounding.
Most of the local ASX sectors are in the red today, with Costa Group Holdings (ASX:CGC) shares down the most, dropping 22 per cent after the horticultural company cut its profit guidance (NPAT-SL) for CY18 to $57 to $66 million on the back of deteriorating factors. CGS says factors include the Driscoll’s grower network starting to see high waste in the raspberry variety from a condition called ‘crumbly fruit’. That has resulted in low yields and labour inefficiencies. While in the mushroom category, it was hit by unexpected and unseasonably warm weather, weaker demand and price softness.
The S&P/ASX 200 index is 0.7 per cent or 46 points lower at 6,394. On the futures market the SPI is 33 points lower.
Local economic news
A major leading indicator for home building (council approvals to build new homes) fell by 4.7 per cent in April (seasonally adjusted terms), falling more than the 3 per cent dip expected. Albeit, it was not as steep as the prior March reading, which saw approvals fall 13.4 per cent.
It comes as approvals fell 19.1 per cent in Tasmania, 16.1 per cent in Victoria, by 6.7 per cent in Western Australia and by 3.3 per cent in South Australia.
Citi has upgraded Sigma Healthcare (ASX:SIG) to a hold or neutral with high risk, from its previously sell (high risk) position. Its 12-month price target of $0.52 was maintained. It comes Sigma’s results were in line with Citi’s forecast, while SIG's capex was higher in FY20 and FY21 than Citi expected, which resulted in Citi slashing its FY20 and FY21 EPS of 8 per cent and 19 per cent respectively for those years. Shares in Sigma Healthcare (ASX:SIG) are 0.5 per cent higher at $0.53 at noon.
AMP (ASX:AMP) has been hit by a class action proceeding for fees charged to members superannuation accounts. The action was filed by Maurice Blackburn in the Federal Court in Melbourne. AMP says it will vigorously defend the actions brought down. AMP shares (ASX:AMP) are trading 0.2 per cent lower at $2.19 at noon.
Australia and the fast-growing Southeast Asian markets, are just about to get improved telco services. It comes as Superloop (ASX:SLC) has announced the subsea cable system between Australia and South East Asia has now been commissioned and is ready to be used by the group of members including AARNet, Google, Indosat Ooredoo, Singtel, SubPartners and Telstra (ASX:TLS). Shares in Superloop are trading 0.7 per cent higher at $1.76 at noon.
Best and worst performers
The best-performing sector is S&P/ASX Communication Services, adding 0.7 per cent. While the rest of the sectors are in the red, with the worst performing sector being S&P/ASX Health Care, shedding 1.4 per cent.
The best performing stock in the S&P/ASX 200 is Syrah Resources Limited (ASX:SYR), rising 6.1 per cent to $1.18, followed by shares in Lynas Corporation Limited (ASX:LYC) and Pilbara Minerals Limited (ASX:PLS).
The worst performing stock in the S&P/ASX 200 is Costa Group Holdings Limited (ASX:CGC) ,dropping 22.6 per cent to $4.01, followed by shares in NRW Holdings Limited (ASX:NWH) and G.U.D. Holdings Limited (ASX:GUD).
Nikkei is down 0.5 per cent Hang Sang down 0.1 per cent and China is down 0.5 per cent.
Commodities and the dollar
Gold is trading at US$1,279 an ounce.
Iron ore price rose 0.1 per cent to US$106.18
Iron ore futures are pointing to a rise of 0.8 per cent.
One Australian dollar is buying 69.21 US cents.