The ASX dropped 49 points at the open but has pared losses as the major banks reverse early falls and gold stocks push higher. The top 200 is now 0.1 per cent higher at 5950. Futures point to a fall of 31 points. Shipbuilding company Austal is this morning's top performer, its shares shooting up after The US Defense Department announced a US$50 million agreement with the company. Building materials supplier James Hardie is also outperforming, adding more than 5 per cent after lifting its guidance for the year ahead. Meantime, As coronavirus cases rise across several parts of the world including Victoria, travel stocks are heading south with Flight Centre among the morning’s worst performers, down by around 5 per cent. Shares in software company Altium meanwhile have dived after the company warned its run-rate has begun to fall behind analyst expectations due to the impacts of recent lockdowns in Beijing and increased infection rates in the US.
Local economic news
RBA Governor Philip Lowe says monetary and fiscal policy should do “whatever it takes” to support the economy, but says it will eventually need to switch to encouraging investment in productive capacity.
He told an ANU University panel that once the virus is contained then Australia’s positive fundamentals "can reassert themselves."
The central bank boss says that Australia had handled the crisis better than many countries and the economic data had not been as bad as expected.
He had forecast a 20 per cent drop in hours worked but it looked like it would be a 10 per cent decline. However, he cautioned that "there is going to be shadow from this crisis that could last for years."Broker moves
Macquarie Bank has downgraded Evolution Mining (ASX:EVN)
to neutral from outperform. The downgrade comes after a 75 000 ounce reduction in its earlier gold production life-of-mine plan and subsequent $75 to $100 million impairment. The investment bank has dropped its price target from $5.60 to $5.40. Shares in the miner are currently 2.5 per cent higher at $5.38Company news
Investment management company Challenger (ASX:CGF)
has gone cap in hand to investors looking to raise $300 million to strengthen its capital position. The company is raising $270 milion through an institutional raising and $30 million through a share purchase plan. Shares in Challenger last traded at $5.32.Best and worst performers
The best performing sector is materials which is 1.8 per cent higher. The worst performing sector is industrials which is 1.5 per cent lower. The best performing stock in the S&P/ASX 200 is Austal (ASX:ASB)
, rising 9.5 per cent to $3.68, followed by shares James Hardie (ASX:JHX)
AND St Barbara (ASX:SBM)
The worst performing stock in the S&P/ASX 200 is Mesoblast (ASX:MSB)
,dropping 9.3 per cent to $3.75, followed by shares in Altium, (ASX:ALU)
and Corporate Travel management (ASX:CTD)
.Commodities and the dollar
Gold is trading at US$1,756 an ounce.
Iron ore is flat at US$102.42.
Iron ore futures are pointing to a fall of 1.7 per cent.
One Australian dollar is buying 68.44 US cents.