The Australian share market opened on shaky ground today following sour economic news in the US. The US Commerce Department announced overnight that US GDP dropped by a record 32.9 per cent (on an annualised basis) in the second quarter, the worst decline on record. The negative sentiment was contagious, with Aussie investors reversing positions today. We saw a broad-based pull back across all of the sectors, with mining losing nearly 3.1 per cent.
The S&P/ASX200 index
At the closing bell the S&P/ASX 200 index closed 123 points lower to finish at 5,928.
Over the week, the market has lost 1.6 per cent or shed 96 points.
Dow futures are suggesting a fall 27 points.
S&P 500 futures are eyeing a rise of 5 points.
The Nasdaq futures are eyeing a lift of 86 points.
And the ASX200 futures are eyeing a 120 point fall on Monday morning.
The Australia Bureau of Statistics today released the Producer Price Index for June. Final demand (excluding exports) fell 1.2 per cent in the second quarter, following a 0.2 per cent drop the previous quarter. The drop is predominately attributed to falls in petroleum refining and petroleum fuel manufacturing, child-care services and other agriculture. The index has fallen 0.4 per cent over the past 12 months.
The Reserve Bank of Australia released private sector credit figures for the month of June. Private sector credit retreated 0.2 per cent last month; following a 0.1 per cent drop in May. Private sector credit is however up 2.9 per cent year on year.
Credit Suisse rates engineering, mining and construction service provider, CIMIC Group (ASX:CIM) as an Outperform with a 12 month price target of $34.00. First half results were weaker than the broker anticipated although the broker believes they were well and truly factored into the share price. No dividend was declared, and management continues to assess the impact of the pandemic on its performance. This comes as the company finalises its sale of 50 per cent of Thiess. Credit Suisse suspects some of the funds from the sale may be used for further share buybacks. Shares in CIMIC Group (ASX:CIM) closed 1.2 per cent lower at $21.48.
Super Retail Group (ASX:SUL) expects to report an increase in revenue, earnings and profit for FY2020, with the group reporting sales growth despite the impacts of Covid-19.
Clean TeQ (ASX:CLQ) has told shareholders it will recognise a non-cash write down of approximately $180 million in its 2020 financial year results for its Sunrise Project and project-related assets.
Woolworths (ASX:WOW) announced its venture capital arm, W23, has converted its $2.95 million convertible bond into 5.9 million CHESS depository interests in meal box delivery company Marley Spoon (ASX:MMM).
Origin Energy (ASX:ORG) reported a 3 per cent drop in production for the June quarter due to lower demand as a result of the Covid-19 pandemic, seeing an overall decline of 5 per cent in its full-year revenue.
Best and worst performers of the day
The best performing sector, with the fewest losses was Consumer Discretionary losing 0.6 per cent while the worst performing sector was Energy, shedding 3.1 per cent.
The best performing stock in the S&P/ASX 200 was Super Retail Group (ASX:SUL), rising 9.5 per cent to close at $8.88. Shares in GWA Group (ASX:GWA) and NRW Holdings (ASX:NWH) followed higher.
The worst performing stock in the S&P/ASX 200 was AMP (ASX:AMP), dropping 12.8 per cent to close at $1.47. Shares in Sandfire Resources (ASX:SFR) and Virgin Money UK (ASX:VUK) followed lower.
Lower: Japan’s Nikkei has lost 2.7 per cent, Hong Kong’s Hang Seng has lost 0.4 per cent and the Shanghai Composite is steady at 0.01 per cent.
Wrapped up our four trading days this week mixed: The Dow Jones lost 0.6 per cent, The S&P 500 added 0.9 per cent and the tech heavy Nasdaq gained 2.1 per cent.
Commodities and the dollar
Gold is trading at US$1,974 an ounce.
Iron ore price is flat at US$110.58.
Iron ore futures are pointing to a rise of just over 1 per cent.
Light crude is US$0.35 up at US$40.27 a barrel.
One Australian dollar is buying 72.22 US cents.