RBA keeps interest rates steady at 0.25%: ASX closes 1.8% lower

Market Reports

by Rachael Jones

It hasn’t been a great start for September for the Australian share market. After a drop at the open the market failed to gain momentum closing 1.8 per cent lower. The Reserve Bank of Australia has held official interest rates at a record low 0.25 per cent. Shares in QBE Insurance Group (ASX:QBE) dropped after the announcement of the shock departure of its CEO. As for the sectors today, all of them closed in the red.

The S&P/ASX200 index

At the closing bell the S&P/ASX 200 index closed 107 points lower to finish at 5,953.

Futures market

Dow futures are suggesting a rise of 28 points.
S&P 500 futures are eyeing a rise of 5 points.
The Nasdaq futures are eyeing a rise of 57 points.
And the ASX200 futures are eyeing a 100 point fall tomorrow morning.

Local economic news

Australia's current account surplus in seasonally adjusted terms increased $8.7 billion to $17.7 billion in the June quarter 2020 despite COVID-19 effects impacted international trade.
The balance on goods and services surplus in the June quarter 2020 was $23.9 billion, a rise of $4.7 billion on the March quarter 2020 surplus of $19.1 billion.
Building approvals rose 12 per cent in July, up from a 4.9 per cent drop in June, and exceeding economist expectations for a 2 per cent slide.

Company news

The Qantas Group (ASX:QAN) has today confirmed a 10 year, $500 million unsecured bond issue as part of ongoing management of its debt maturity profile. Once settled, the proceeds will strengthen short term liquidity and then be used to pay $400 million in bonds due to expire in June 2021. The coupon for the new bond, which was oversubscribed, is 5.25 per cent – significantly lower than the 7.5 per cent funding it replaces. The Group continues to have no financial covenants on any of its debt. Qantas is one of few airlines with continued access to long term, unsecured bond markets. Shares in The Qantas Group (ASX:QAN) closed 1.3 per cent lower at $3.89.

Metcash (ASX:MTS) today announced that it has completed the acquisition of a 70 per cent interest in Total Tools Holdings. The terms of the agreement, including the purchase price of $57 million for the 70 per cent.
QBE Insurance Group (ASX:QBE) today announced that their Group Chief Executive Officer Pat Regan will be departing the organisation after almost three years in the role. This follows the outcome of an external investigation concerning workplace communications that the Board concluded did not meet the standards set out in the Group Code of Ethics and Conduct.

Zip Co (ASX:Z1P) is pleased to announce that the acquisition of QuadPay, Inc was completed yesterday and the issuance of $200 million in convertible notes and warrants completed today. QuadPay is a leading, high growth, US-based BNPL player disrupting the credit card industry.

Best and worst performers of the day

The best performing sector was utilities losing the least at 0.3 per cent while the worst performing sector was Infotech shedding 3.4 per cent.

The best performing stock in the S&P/ASX 200 was Cooper Energy (ASX:COE), rising 6.1 per cent to close at $0.35. Shares in Resolute Mining (ASX:RSG) and Costa Group Holdings (ASX:CGC) followed higher.

The worst performing stock in the S&P/ASX 200 was Afterpay (ASX:APT), dropping 8.04 per cent to close at $84.09. Shares in EML Payments (ASX:EML) and QBE Insurance Group (ASX:QBE) followed lower.

Asian markets

Mixed: Japan’s Nikkei has lost 0.01 per cent, Hong Kong’s Hang Seng has gained 0.1 per cent and the Shanghai Composite has lost 0.03 per cent.

Commodities and the dollar

Gold is trading at US$1,984 an ounce.
Iron ore price is 0.1 higher at US$124.47
Iron ore futures are pointing to a fall of 0.1 per cent.
Light crude is US$0.41 higher at US$43.62 a barrel.
One Australian dollar is buying 73.99US cents.