The biggest monthly decline in jobs on record: ASX tracking 0.9% lower at noon

Market Reports

by Rachael Jones

The Australian share market dropped at the open and is now tracking 0.9 per cent lower at noon. Shares in agribusiness GrainCorp (ASX:GNC) are doing well today after they reported a profit after tax of $388 million for the half-year ending 31 March. Meanwhile shares in shopping centre company Unibail-Rodamco-Westfield (ASX:URW) saw their shares drop this morning.

The S&P/ASX 200 index is 47 points down at 5,375. On the futures market the SPI is 67 points lower.

Local economic news

The unemployment rate increased by 1.0 percentage point from 5.2 per cent to 6.2 per cent. The larger than usual number of employed and unemployed people leaving the labour force resulted in an unprecedented fall in the participation rate by 2.4 percentage points to 63.5 per cent. Employment fell by 594,300 in April – the biggest monthly decline in jobs on record.

Broker moves

UBS rates BHP (ASX:BHP) as an Upgrade to a Buy from a Neutral. The stock has declined -20 per cent since February because of the pandemic and the breakdown of the OPEC negotiations which have affected oil prices. Yet, UBS believes the company is in a strong position and should be able to return surplus cash to shareholders at a time when other more traditional dividend-paying stocks cannot. Target price is $38.00. Shares in BHP (ASX:BHP) are tracking 0.5 per cent lower at $30.84.

Company news

United Malt (ASX:UMG) is raising $140 million via a fully underwritten institutional placement and a nonunderwritten Share Purchase Plan. The company was demerged from GrainCorp (ASX:GNC) and now operates as a separate listed entity as the world’s fourth largest independent commercial maltster, with operations in Canada, the United States, Australia and the United Kingdom and strong market shares in these countries in the craft brewing and Scotch whisky sectors. For the half year ended 31 March 2020, the Company reported underlying net profit after tax of $28.53 million. Revenue increased by 9 per cent vs. pcp to $664.64 million. Shares in United Malt (ASX:UMG) last traded $4.29.

Best and worst performers

The best-performing sector is Utlities gaining 0.5 per cent, while the worst performing sector is Energy losing at 2 per cent.

The best performing stock in the S&P/ASX 200 is Graincorp (ASX:GNC) rising 16.4 per cent to $3.83, followed by shares in Breville Group (ASX:BRG) and Resolute Mining (ASX:RSG).

The worst performing stock in the S&P/ASX 200 is Unibail-Rodamco-Westfield (ASX:URW) dropping 6.3 per cent to $3.71, followed by shares in Janus Henderson (ASX:JHG) and McMillan Shakespeare (ASX:MMS).

Asian markets

Lower: Japan’s Nikkei is 0.8 per cent lower. Hong Kong’s Hang Seng has lost 1.3 per cent and China’s Shanghai Composite has lost 0.6 per cent.

Commodities and the dollar

Gold is trading at US$1,714 an ounce.
Iron ore price is flat at $91.63.
Iron ore futures are suggesting a rise of 0.9 per cent.
One Australian dollar is buying 64.27US cents.