COVID-19 Virus infects markets: Aus shares 2.7% lower at noon

Market Reports

by Katrina Bullock

The Australian share market is trading at a nine-month low this morning, extending last week’s losses. The ASX200 index has tumbled 2.7 per cent following negative leads from almost all major international markets, except the tech heavy Nasdaq, as negative sentiment from the Coronavirus outbreak continues to alarm investors. Mining stocks are amongst the hardest hit – Shares in Fortescue Metals Group (ASX:FMG), Gold Road Resources (ASX:GOR) and Silver Lake Resources (ASX:SLR) have each fallen more than 10 per cent over the first two hours of trade. 

The S&P/ASX 200 index is 172 points lower at 6,270. On the futures market the SPI is pointing to a 140 point fall.

Broker moves

Credit Suisse has increased its 12 month price target on the a2 Milk Company (ASX:A2M) from NZ$14.40 to NZ$16.38. First half operating earnings (EBITDA) were ahead of Credit Suisse estimates. The broker projects that a lack of confidence in the domestic food chain might be resulting in a shift back to international infant formula brands in China. a2 Milk has also signalled that it is evaluating opportunities to participate in manufacturing activity. The company's fiscal year ends in June. Shares in a2 Milk Company (ASX:A2M) are trading 2.2 per cent lower at $15.09.

Local economic news

AiGroup has released the performance of manufacturing figures for February. The Index fell a further 1.1 points to 44.3 points in February. This marked four consecutive months of contraction in Australian manufacturing – the longest downward trend since 2014. This is also the lowest monthly result in almost 5 years.

Company news

Additive manufacturer Titomic (ASX:TTT) today released the offer booklet for the share purchase plan it announced last Wednesday. It is offering eligible Titomic shareholder the opportunity to subscribe for up to $10,000 worth of new, fully paid, ordinary shares in the company without incurring brokerage or other transaction costs. It aims to raise $1 million, not underwritten. Titomic recently undertook a placement of fully paid, ordinary shares to institutional funds and international long-term investors raising $19 million. Proceeds will be used to provide additional capabilities to the existing TKF Melbourne Bureau production facility; secure additional human resources and business capabilities; establish offshore operations and to support sales growth. Shares in Titomic (ASX:TTT) are trading 16.3 per cent lower at 82 cents.

Best and worst performers

Every sector is in the red. The sector with the fewest losses is Consumer Staples, losing 1.4 per cent, while the worst performing sector is Materials, shedding 3.2 per cent.

The best performing stock in the S&P/ASX 200 is Costa Group Holdings (ASX:CGC), rising 4.4 per cent to $3.09, followed by shares in Blackmores (ASX:BKL) and Reliance Worldwide Corporation (ASX:RWC).

The worst performing stock in the S&P/ASX 200 is IDP Education (ASX:IEL),dropping 12.1 per cent to $18.68, followed by shares in Fortescue Metals (ASX:FMG) and Silver Lake Resources (ASX:SLR).

Commodities and the dollar

Gold is trading at US$1,601 an ounce.
Iron ore price fell 2.1 per cent to US$83.96.
Iron ore futures are pointing to a rise of 2.6 per cent.
One Australian dollar is buying 65.10 US cents.