Bank and travel stocks lead losses: Aus shares close 1.7% lower

Market Reports

by Ortenzia Borre

The Australian share market opened with more losses this morning and continued to fall in the back half of the trading session closing 1.7 per cent lower. Banks stocks weighed heavily on today’s slide following yesterday’s rate cut with travel stocks Webjet (ASX:WEB) and Corporate Travel Management (ASX:CTD) also leading the losses. Shares were up of the gold producers, Northern Star (ASX:NST) and Regis Resources (ASX:RRL) are leading the gains and Materials is the only sector that closed in the green today.

The S&P/ASX200 index

At the closing bell the S&P/ASX 200 index closed 110 points lower to finish at 6,325.

Futures markets 

Dow futures are suggesting a rise of 327 points.
S&P 500 futures are eyeing a rise of 34 points.
The Nasdaq futures are eyeing a lift of 109 points.
The ASX200 futures are eyeing a 72 point fall tomorrow morning.

Broker moves

UBS has rated Bendigo and Adelaide Bank (ASX:BEN) as a Sell. Having placed all ratings and price targets under review prior to the RBA rate cut, UBS analysts have now responded by reducing earnings estimates and price targets across the sector and says National Australia Bank is the only bank that does not see its price target decline. UBS is anticipating yet another rate cut from the RBA in April. The banks will lower deposit rates, but UBS confidently predicts this won't be sufficient to offset downward pressure on the net interest margin. UBS suggests investors should remain cautious towards the sector, arguing current share price weakness is a reflection of the new reality for the sector.  The reduced forecasts translate into a price target cut to $8.25 from $9. Shares in Bendigo and Adelaide Bank (ASX:BEN) closed 4.1 per cent lower at $8.53.

Economic news

Despite the recent impacts on the economy, the ABS has today released figures reporting the economy grew 0.5 per cent in the December quarter and 2.2 per cent through the year.

ABS Chief Economist, Bruce Hockman, says the economy has continued to grow and picked up through the year, however the rate of growth remains below the long run average.

Domestic demand remained subdued with 0.1 per cent growth in the December quarter. A pick up in household discretionary spending and continued increases in the provision of government services was dampened by falls in dwelling and private business investment.

Falls in dwelling investment continued, declining 3.4 per cent during the quarter, the sixth consecutive fall.

Company news

Eclipx Group (ASX:ECX) has appointed Damien Berrell as Group CFO. Mr Berrell will step into the role from next month. He is currently CFO at GE Custom Fleet. Damien’s appointment comes shortly after the appointment of Dom Di Gori as Group Treasurer and James Allaway as Group Head of Strategy, Restructuring and M&A. Shares in Eclipx Group (ASX:ECX) closed 5.5 per cent lower at $1.37.

Looking at some more headlines:

Real estate group Dexus (ASX:DXS) will end the management of the Australian Mandate, comprising a $1.6 billion property portfolio from 30 June 2020.

Neuren Pharmaceuticals (ASX:NEU) sees FDA approval for the treatment of neurological disorder Rett syndrome.

Crown Resorts (ASX:CWN) welcomes Ken Barton as a director.

Best and worst performers of the day

The best performing sector was Materials adding 0.1 per cent while the worst performing sector was Information Technology, shedding 4.2 per cent.

The best performing stock in the S&P/ASX 200 was Northern Star (ASX:NST), rising 6.8 per cent to close at $14.09. Shares in Regis Resources (ASX:RRL) and Saracen Mineral Holdings (ASX:SAR) followed higher.

The worst performing stock in the S&P/ASX 200 was Corporate Travel Management (ASX:CTD), dropping 9.3 per cent to close at $12.27. Shares in Webjet (ASX:WEB) and Computershare (ASX:CPU) followed lower.

Asian markets

Mixed: Japan’s Nikkei has added 0.3 per cent, Hong Kong’s Hang Seng has lost 0.02 per cent and the Shanghai Composite has lost 0.1 per cent.

Commodities and the dollar

Gold is trading at US$1,644 an ounce. 
Iron ore price fell 0.4 per cent to US$88.55.
Iron ore futures are pointing to a fall of 0.2 per cent.
Light crude is 67 cents higher at US$47.85 a barrel.
One Australian dollar is buying 65.97 US cents.