Fitch downgrades the Big Four banks: ASX tracking 0.3% lower at noon

Market Reports

by Rachael Jones

The Australian share market dropped at the open and is struggling to gain momentum but managed to scrape back to be now tracking 0.3 per cent lower at noon. It is a big news day for banks as the economic crisis from COVID-19 has prompted Fitch Ratings to downgrade the credit rating for the big four. They must now consider reductions in dividends. As for the sectors consumer discretionary is leading the pack today with Financials not surprisingly coming in last.

The S&P/ASX 200 index is 18 points down at 5,235. On the futures market the SPI is 20points lower.

Local economic news

The value of new loan commitments for housing fell 1.7 per cent in February, seasonally adjusted, according to the latest Australian Bureau of Statistics figures.

Broker moves

Credit Suisse rates BHP (ASX:BHP) as an Upgrade to Outperform from a Neutral. They believe this is a rare opportunity to buy BHP Group with a portfolio of large projects in attractive markets. As BHP looks to exit the thermal coal business, Credit Suisse expects proceeds will be handed over to shareholders as no further de-leveraging is required.Target is reduced to $39 from $41. Shares in BHP (ASX:BHP) are currently tracking 0.95 per cent lower at $31.40.

Company news

Treasury Wine Estates (ASX:TWE) announced today its intention to consider a demerger of the Penfolds business and associated assets into a separate company. The decision follows a detailed review of TWE’s portfolio and an assessment of both the optimal strategy and structure of the business. It would accelerate the separate focus for the Luxury versus Commercial portfolios, globally. Penfolds accounts for approximately 10 per cent of volume, but well over half of their earnings. Shares in Treasury Wine Estates (ASX:TWE) are currently up 3.7 per cent at $10.95.

Best and worst performers

The best-performing sector is consumer discretionary is up 1.5 per cent, while the worst performing sector is Financials losing 1.3 per cent.

The best performing stock in the S&P/ASX 200 is Unibail-Rodamco-Westfield (ASX:URW) rising 12.2 per cent to $5.05, followed by shares in Virgin Money UK (ASX:VUK) and Austal (ASX:ASB).

The worst performing stock in the S&P/ASX 200 is Jumbo Interactive (ASX:JIN) dropping 7.7 per cent to $10.37, followed by shares in Shopping Centres Australasia Property Group (ASX:SCP) and Oil Search (ASX:OSH).

Asian market

Asian markets are currently mixed: Tokyo’s Nikkei gained 0.5 per cent, Hong Kong’s Hang Seng lost 1.1 per cent and China’s Shanghai Composite is down 0.6 per cent.

Commodities and the dollar

Gold is trading at US$1,649 an ounce.
Iron ore price is 0.7 per cent down at US$82.73.
Iron ore futures are up 1.6 per cent.
One Australian dollar is buying 61.41US cents.