Iron ore miners lead decline: ASX tracking 0.9% lower at noon

Market Reports

by Michael Luu

The ASX took a dip this morning, following negative leads from US futures and a sharp fall in the iron ore price overnight. Iron ore miners Mineral Resources(ASX:MIN) and Fortescue Metals (ASX:FMG) led the decline, joining the ranks of the worst performers at noon. The tech sector was also lower, adding further downward pressure.

The S&P/ASX 200 index

The S&P/ASX 200 index is 0.9 per cent lower or 51 points down at 5905. On the futures market the SPI is suggesting a fall of 50 points.

Local economic news

The unemployment rate fell by 87,000 to 6.8 per cent - 0.7 per cent below consensus. This coincided with a 0.9 per cent increase in employment rate, with female employment making up 63 per cent of the total amount.

The number of hours worked has also risen modestly, reflecting the growth in part-time employment between May and August. Head of Labour Statistics at the ABS Bjorn Jarvis revealed that the increase in part-time employment has been almost 8 times higher than in full-time employment.

However, stringent COVID-19 restrictions have pushed the unemployment rate the other way to 7.1 per cent in Victoria

Broker Moves

Macquarie has rated accounting system operator Xero (ASX:XRO) as a Neutral. Despite the impact of COVID-19 on the SME sector, Macquarie cites the value of Xero’s product suite and customer base. Macquarie sees long-term investment in the company brings about great potential for profits. Macquarie strategists have lifted the target price for Xero from $75 to $85

Company News

City Chic Collective (ASX:CCX)’s desire for expansion in the US has taken a step back, after the company was outbid by an anonymous bidder for the online infrastructure of collapsed fashion company Catherines. City Chic (ASX:CCX)saw the final bidding price of $US40.8 m as overpriced, compared to the Australian fashion retailer’s valuation of $16m. Chief Executive Officer Phil Ryan deemed this result disappointing, as the company had raised around $80m in July for growth.

City Chic (ASX:CCX) shares are trading 7.1 per cent lower at $3.14.

Best and worst performers

The best-performing sector is Real Estate Investment Trusts, adding 0.8 per cent, while the worst performing sector is Information Technologies, shedding 2.4 per cent.

The best performing stock in the S&P/ASX 200 is Scentre Group (ASX:SCG) rising 3.3 per cent to $2.35, followed by shares in Mirvac Group (ASX:MGR) and Orora (ASX:ORA).

The worst performing stock in the S&P/ASX 200 is Mineral Resources (ASX:MIN), dropping 8.4 per cent to $25.25, followed by shares in Breville Group (ASX:BRG) and Fortescue Metals Group (ASX:FMG).

Commodities and the dollar

Gold is trading at US$1,944 an ounce.
Iron ore price dipped 3.4 per cent to US$124.20
Iron ore futures are pointing to a fall of 2.2 per cent.
One Australian dollar is buying 72.69 US cents.

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