Interest rates tipped to drop tomorrow: Aus shares 0.7% lower at noon

Market Reports

by Jessica Amir

The Australian share market fell sharply at the open and is now trading 0.7 per cent lower at noon. It comes as sharp losses were also seen on Wall Street on Friday after US President Donald Trump threatened a 5 per cent tariff on all Mexican imports from 10 June. Fiat Chrysler shares fell 5.8 per cent and Volkswagen lost 2.6 per cent. While on Sunday, China also released an official statement, blaming the US for the trade war, illustrating a widening gap between the two powerhouse nations.

Back home, the news has hit most of the sectors with the majority in the red. Energy. Telcos, Tech and Healthcare sectors are down one per cent or more.

Broker moves

Citi has reiterated Amcor (ASX:AMC) as a buy, with a 12-month price target of $16.10. It comes AMC announced it received final regulatory clearance from the US Department of Justice, for the merger transaction with NYSE listed entity Bemis (NYSE:BMS). Citi says there will likely be a consensus upgrades of 6 per cent on its earnings. It’s trading 1.1 per cent lower at $16.30 at noon.

AGL (ASX:AGL) had it buy rating dropped to a neutral or hold by Goldman Sachs on plant reliability concerns and regulatory overhang. Its target price for AGL is $22. Its 52-week high price is $23.30. It’s trading 1.2 per cent lower at $20.31. at noon.

The S&P/ASX 200 index

0.7 per cent or 45 points down at noon at 6,352. On the futures market the SPI is 53 points lower.

Local economic news

The consensus is that rates will drop by 0.25 per cent tomorrow to 1.25 per cent. So all eyes will be on the RBA tomorrow, when the bank hands down its decision at 2.30pm.

CoreLogic today released fresh property data saying the pace of property declines eased further in May, although dwelling values are still trending lower across Australia and have been since the beginning on 2019. Nationally, dwelling values were down 0.4 per cent in May, which was the smallest month-on-month decline since May 2018.

Company news

Agricultural chemical company Nufarm (ASX:NUF) sent a release to the market announcing as it’s supplier of glyphosate based herbicides, the company is exposed to risk of litigation brought against such suppliers. Shares in Nufarm (ASX:NUF) are trading 5.3 per cent lower at $3.73 at noon.

St Barbara (ASX:SBM) shares have bounced of an almost two year low following a Norges Bank transaction with the Norway banking increasing its stake in the gold major to over 5 per cent. Shares in St Barbara (ASX:SBM) are trading 2.3 per cent higher at $2.62 at noon. Year-on-year its trading 34 per cent lower. While over five years, its share have gained over 1,700 per cent.

Best and worst performers

The best-performing sector is S&P/ASX A-REIT, adding 0.8 per cent. While the worst performing sector is S&P/ASX Energy, shedding 1.4 per cent, leading all the other sectors lower.

The best performing stock in the S&P/ASX 200 is Eclipx Group (ASX:ECX), rising 19.6 per cent to $1.34, followed by shares in Saracen Mineral Holdings Limited (ASX:SAR) and Regis Resources Limited (ASX:RRL).

The worst performing stock in the S&P/ASX 200 is Nufarm Limited (ASX:NUF) dropping 5.3 per cent to $3.73, followed by shares in Seven Group Holdings Limited (ASX:SVW) and Cooper Energy Limited (ASX:COE).

Asian markets

Mixed: Japan’s Nikkei has lost 1 per cent, Hong Kong’s Hang Seng has lost 0.2 per cent and the Shanghai Composite has gained 0.1 per cent.

Commodities and the dollar

Gold is trading at US$1,311 an ounce.
Iron ore price fell 2.2 per cent to US$101.60
Iron ore futures are pointing to a fall of 2.3 per cent.
One Australian dollar is buying 69.50 US cents.