GrainCorp (ASX:GNC) plummets almost 60%: Aus shares close 4.2% higher

Market Reports

by Ortenzia Borre

It has been a relatively positive day of trade for the Australian share market. After opening over 2 per cent within the first 15 minutes of trade, the market took a dip at midday before recovering to close 4.2 per cent up at the closing bell. Credit Corp (ASX:CCP) gained 46 per in today’s single session and Afterpay (ASX:APT) also enjoyed a strong session following yesterday’s slide.GrainCorp (ASX:GNC) plummeted almost 60 per cent throughout the session feeling the punch from today’s scheduled United Malt demerger, and there was no rest for Virgin Money UK, (ASX:VUK) continuing to slide, following updated tougher COVID-19 implementations in the UK.

As for the sectors, Energy came out on top, boosted by Santos gaining 20 per cent, and Consumer Stables was our worst performer, although still finishing in the green.

The S&P/ASX200 index

At the closing bell the S&P/ASX 200 index closed 190 points higher to finish at 4,736.
Futures market are in the black
Dow futures are suggesting a rise of 631 points.
S&P 500 futures are eyeing a rise of 86 points.
The Nasdaq futures are eyeing a lift of 242 points.
And the ASX200 futures are eyeing a 256 point rise tomorrow.

Broker moves

UBS has rated Link Administration Holdings (ASX:LNK) as a Buy. The broker says while 80% of Link Group's revenue is recurring in nature, transactional and market-related revenues are at risk due to market volatility and economic pressures. Link has withdrawn FY20 guidance and taking the GFC experience as a guide, the broker lowers its 2020 profit forecast by -18%, noting outer year earnings are less affected thanks to the lower Australian dollar. Link is comfortably within its covenants, and on a -55% fall in share price the broker retains Buy. Target falls to $5.00 from $6.25. Target price is $5.00 Current Price is $2.77 Difference: $2.23.
Shares Link Administration Holdings (ASX:LNK) closed 6.7 per cent higher at $2.88.

Company news

South32’s (ASX:S32) South African Energy Coal and Aluminium operations have been ordered into lockdown, after South African President, Cyril Ramaphosa, enforced a 3 week nation-wide lockdown aimed at containing the spread of COVID-19. The mining company understands that businesses essential for the maintenance of power generation in South Africa are exempt from the lockdown and are yet to determine the impact of this exemption. South 32 says they are seeking further clarification from the South African government following this afternoon’s announcement and as a result of the lockdown the are withdrawing their FY20 guidance for the South African operations. Shares in South 32 (ASX:S32) closed 5.1 per cent higher at $1.75.

Looking at some more headlines:

Ro Tinto (ASX:RIO) are delaying operations in Canada to help contain the spread of COVID-19.

Healius (ASX:HLS) has suspended its financial year guidance as the company reveals they are undertaking approximately 2500 COVID-19 test per day and certain non-critical and routine services have declined.

PPK Group (ASX:PPK) says that despite the recent outbreak both their BNNT production facilities and mining services facilities are open and fully functional, highlighting their on-track, shipping to customers to meet initial orders for research purposes.

Best and worst performers of the day

The best performing sector was Energy adding 7.6 per cent while the sector with the fewest gains was Consumer Staples, adding 1.1 per cent. The best performing stock in the S&P/ASX 200 was Credit Corp Group (ASX:CCP), rising 45.9 per cent to close at $9.12. Shares in Corporate Travel Management (ASX:CDT) and Afterpay (ASX:APT) followed higher.

The worst performing stock in the S&P/ASX 200 was GrainCorp (ASX:GNC), dropping 55.6 per cent to close at $3.07. Shares in Virgin Money UK (ASX:VUK) and IOOF Holdings (ASX:IFL) followed lower.

Asian markets

Japan’s Nikkei has added 5.7 per cent, Hong Kong’s Hang Seng has added 3.8 per cent and the Shanghai Composite has gained 1.4 per cent.

Commodities and the dollar

Gold is trading at US$1,572 an ounce.
Iron ore price fell 7.9 per cent to US$81.07.
Iron ore futures are pointing to a fall of 2.3 per cent.
Light crude is US$1.34 up at US$32.84 a barrel.
One Australian dollar is buying 59.14 US cents.