Aus shares to drop at the open on the back of mixed overseas leads: reporting season ramps up

Market Reports

by Anna Napoli

Australian shares are set to drop at the open, taking direction from losses in Europe and lacklustre trading in the US. Wall Street was mixed retail sales in July fell short of forecasts, production met expectations. Shares in chip maker Applied Materials rose 3.9 per cent after it forecast fourth-quarter revenue above analyst estimates. Investors are also concerned over stalled coronavirus stimulus negotiations and simmering US-China tensions.

Back home reporting season ramps up this week today we can expect results from Altium (ASX:ALU), Amcor (ASX:AMC), Beach Energy (ASX:BPT), Bendigo & Adelaide Bank (ASX:BEN), BlueScope Steel (ASX:BSL), GWA Group (ASX:GWA), JB Hi-FI (ASX:JBH), Lendlease (ASX:LLC), Viva Energy (ASX:VEA).

Markets

To the figures from around the globe: Wall Street closed mixed on Friday: The Dow Jones Industrial Average gained 0.1 per cent to close at 27,931, the S&P 500 lost 0.02 per cent to close at 3373 and the NASDAQ closed 0.2 per cent lower at 11,019.

European markets closed lower: London’s FTSE lost 1.6 per cent, Paris dropped 1.6 per cent and Frankfurt closed 0.7 per cent lower.

Asian markets closed mixed, Nikkei added 0.2 per cent, Hong Kong’s Hang Seng fell 0.2 per cent and China’s Shanghai Composite added 1.2 per cent.

Taking all of this into equation, the SPI futures are pointing to a 0.95 per cent fall.

On Friday, the Australian share market gained 35 points to close at 6126.

Local economic news

The week kicks off today when the ABS releases provisional July overseas travel statistics. Tomorrow the Reserve Bank issues the minutes of its August 4 Board meeting. On Wednesday, the ABS issues the provisional mortality statistics for the five-month period to May. The data puts in perspective deaths from COVID-19 compared with deaths of other causes. Also on Wednesday the Department of Employment releases the July skilled job vacancies data.
On Thursday, the ABS releases the detailed July labour force report. On Friday the ABS issues the preliminary July retail trade data.
Also on Friday, the CBA issues the ‘flash’ (or early) results from surveys of purchasing managers for August.

Company news

BlueScope Steel has reported FY2020 net profit (NPAT) of $96.5 million, including a $197.0 million non-cash write-down of the New Zealand and Pacific Islands segment. Underlying NPAT was $353.0 million . The Company’s underlying earnings EBIT was $564.0 million which Managing Director and CEO, Mark Vassella said was a strong result in the context of the COVID-19 pandemic and the decline in steel spreads. He said “While no one knows how this pandemic will play out, BlueScope has shown once again the resilience in its earnings, the quality of its cash flow and the strength of the balance sheet,”Shares in BlueScope Steel (ASX:BSL) closed 2.5 per cent lower at $12.07 on Friday.

Currencies

One Australian Dollar at 7:40 AM was buying 71.78 US cents, 54.81 Pence Sterling, 76.55 Yen and 60.62 Euro cents.

Commodities

Iron Ore has gained 0.9 per cent to US$122.44.
Iron Ore futures suggest a 0.8 per cent gain.
Gold has lost $20.60 to US$1950 an ounce.
Silver was down $1.67 cents to US$26.26 an ounce.
Oil has lost $0.23 to US$42.01 a barrel.