Aus shares 0.9% lower at noon despite gold surge

Market Reports

by Kathy Skantzos

The Australian share market dropped at the opening bell as expected and has faltered to an almost 1 per cent fall. This comes despite a surge in gold and a rally in the mining sector, but that isn’t enough to keep the markets in the green today. The major banks are driving the fall, with ANZ, Westpac, NAB and Commonwealth all trading lower.

The S&P/ASX 200 index is 54 points lower at 5,984. On the futures market the SPI is 65 points down.

Local economic news

The value of new loan commitments for housing rose 6.2 per cent in June, according to the latest Australian Bureau of Statistics figures released today. ABS Chief Economist Bruce Hockman said: “The rise in housing loan commitments in June reflects the easing of Covid-19 restrictions in May on auctions, open houses and mobility in general.”

Broker moves

Macquarie rates ANZ (ASX:ANZ) as Upgrade to Neutral from Underperform. With 10-15 per cent of consumer and small-medium enterprise loans being deferred, along with a weak economic outlook, there is downside risk to bank earnings. While recognising the risk of a relief rally as the sector is at a deep discount to its long-term history, in the medium-term Macquarie expects banks will deliver lower underlying returns. ANZ is upgraded to Neutral from Underperform, given the changes. The target price is reduced to $18.25 from $18.50. Shares in ANZ (ASX:ANZ) are trading 1.8 per cent lower at $17.19.

Company news

Village Roadshow (ASX:VRL) continues to negotiate with BGH Capital over its takeover deal, today extending the period for exclusive discussions for a fourth time. The talks have been extended to 6 August after an initial deadline of 18 June. Shares in Village Roadshow (ASX:VRL) are trading 2.3 per cent lower at $2.13.

Smartpay’s (ASX:SMP) CEO and Managing Director Bradley Gerdis has resigned and will step down from the role on 1 September. He will be replaced by current COO and and Executive Director Marty Pomeroy. Shares in Smartpay (ASX:SMP) are trading 3.2 per cent lower at $0.60.

Best and worst performers

The best-performing sector is Materials gaining 0.1 per cent, while the worst performing sector is Financials losing at 1.7 per cent.

The best performing stock in the S&P/ASX 200 is Mesoblast (ASX:MSB) rising 6.1 per cent to $4.37, followed by shares in St Barbara (ASX:SBM) and Orocobre (ASX:ORE).

The worst performing stock in the S&P/ASX 200 is Monadelpheous (ASX:MND) dropping 5 per cent to $7.84, followed by shares in Omni Bridgeway (ASX:OBL) and NRW Holdings (ASX:NWH).

Commodities and the dollar

Gold is trading at US$2,013 an ounce.
Iron ore price is 1.6 per cent higher at US$117.88.
Iron ore futures are flat.
One Australian dollar is buying 71.82US cents.