Iron ore fuels strong export results: Aus shares 1.1% lower at noon

Market Reports

by Kathy Skantzos

The Australian share market slid this morning and is now tracking almost 1.1 per cent lower at noon.

Cooper Energy (ASX:COE) shares have dropped after reporting a weaker-than-expected FY21 result, and Evolution Mining (ASX:EVN) also pulled the market down. IAG (ASX:IAG) shares have also dropped on the announcement it’s not paying shareholders dividends after flagging flat growth in gross written premiums ahead of its full-year results.

The S&P/ASX 200 index is 65 points lower at 6,030. On the futures market the SPI is pointing to a fall of 61 points.

Local economic news

The ABS has announced a jump in export growth on the back off strong iron ore exports, with the value of exports increasing by $2.35 billion, or 8 per cent.

From May to June 2020, exports of iron ore increased by $757 million or 8 per cent to $9.92 billion, the highest export value on record. China was the main market driver for Australian iron ore exports.

Broker moves

Macquarie rates Cooper Energy as Downgrade to Neutral from Outperform.

Cooper Energy (ASX:COE) has released a weaker-than-expected FY21 guidance, with Macquarie blaming the Otway shutdown, as well as Cooper declines and an uncertain outlook for the Sole project.

In light of a resilient share price, combined with Sole uncertainty, Macquarie thinks the safer option is to downgrade to Neutral from Outperform.

Target price has fallen to 44c from 55c. Estimates have been scaled back and EPS is now expected to return into the black in FY22 instead of the previously forecasted FY21.

Company news

Mineral Resources (ASX:MIN) saw record iron ore and lithium production in the June quarter. The iron ore miner delivered total production of 4.2 million wet metric tonnes (wmt), a 22 per cent increase from the third quarter of the 2020 financial year (Q3 FY20). Shares in Mineral Resources (ASX:MIN) are trading 0.5 per cent lower at $24.41.

Best and worst performers

Utilities is the best-performing sector so far today and the only sector in the green, gaining 0.3 per cent, while the worst performing index is Info Technology losing at 2.9 per cent.

The best performing stock in the S&P/ASX 200 is IGO (ASX:IGO) rising 4.8 per cent to $5.42, followed by shares in Elders (ASX:ELD) and Charter Hall (ASX:CLW).

The worst performing stock in the S&P/ASX 200 is Evolution Mining (ASX:EVN) dropping 6.6 per cent to $5.90, followed by shares in Cooper Energy (ASX:COE) and IAG (ASX:IAG).

Commodities and the dollar

Gold is trading at US$1,885 an ounce.
Iron ore price is 0.7 per cent lower at US$110.12.
Iron ore futures are pointing to a fall of 1 per cent.
One Australian dollar is buying 71.17 US cents.
 

Kathy Skantzos

Finance News Network
Kathy presents the Market Outlook and ASX company news. She joined FNN in September 2017. She has been in print and online journalism for over 9 years. She also worked in corporate communications.