ASX retreats on Covid-19 jitters & geopolitical tension: Aus shares closes 0.5% lower

Market Reports

by Melissa Darmawan

Text-only (non-video) report.

The local market closed in negative territory for the first time this week as Chinese officials suspend an economic dialogue with Australia, a move to show Beijing’s growing frustration with Canberra. Investor’s sentiment weakened as health authorities traced two new local covid-19 infections in Sydney, with a three-day restriction reintroduced to start at 5pm for greater Sydney residents. The quarantine free travel bubble between New Zealand and NSW has been paused for 48 hours from tonight following this move. The index’s retreat from its 14-month high yesterday was weighed down by Information Technology and the Communication sector with Materials and Energy as the only two sectors in the green helped by the price of iron ore prices rising by 2 per cent. Mining giants BHP (ASX:BHP) closed 2.1 per cent higher with Rio Tinto (ASX:RIO) up 1 per cent. Insurance companies helped minimize the losses with QBE (ASX:QBE) adding 3.1 per cent and IAG (ASX:IAG) up 2 per cent. On the banking front, CBA (ASX:CBA) and Westpac (ASX:WBC) edged higher though its peers NAB (ASX:NAB) dragged on the sector closing 3 per cent lower following its half year results with ANZ (ASX:ANZ) also in the red. Technology stocks Nearmap (ASX:NEA) and Appen (ASX:APX) closed over 20 per cent lower with Afterpay (ASX:APT) shedding 7 per cent following Paypal’s announcement this morning to launch a competitive offer in the buy now pay later space. Travel stocks flew into the red with the likes of Webjet (ASX:WEB) sinking 6.3 per cent, Flight Centre (ASX:FLT) falling 5.3 per cent and Qantas (ASX:QAN) down 1.5 per cent. At the closing bell, the S&P/ASX 200 was 0.48 per cent or 34.10 points lower at 7,061.70.

Futures

The Dow Jones futures are pointing to a rise of 54.00 points.
The S&P 500 futures are pointing to a rise of 5.25 points.
The Nasdaq futures are pointing to a rise of 22.00 points.
The SPI futures are pointing to a fall of 44 points when the market next opens.

Economic news

Deputy Governor Guy Debelle is to deliver the “Monetary Policy during Covid” speech in Perth this evening before the release of its quarterly Statement on Monetary Policy tomorrow.

Broker moves

Citi rates GUD Holdings (ASX:GUD) as a neutral with a price target of $14.20 from $14.90. The downgrade from a buy follows the broker’s reduced expectation on its favourable trading conditions due to cost pressures from suppliers and freight. The broker suspects the business may find it difficult to generate more than mid single-digit top-line growth over the medium term without acquisitions or a significant export strategy. Shares in GUD (ASX:GUD) closed 0.53 per cent higher at $13.27.

Company news

Please join us at Stocks of the Hour here.

Banking giant National Australia Bank (ASX:NAB) has bumped up its interim dividend twofold from last year's payout to 60 cents per share, after its cash profit exceeded forecasts for the first half of FY21.

Qantas (ASX:QAN) will continue its head office in Sydney and maintain their Jetstar operations in Melbourne following the start of their property footprint review in September 2020. The company has committed to keeping their heavy maintenance facility in Brisbane and establish a new flight training centre with aircraft simulators in NSW from 2023.

The ACCC is planning to knock back the plan for Qantas (ASX:QAN) and Japan Airlines to coordinate flights as the watchdog claims it breaches competition laws.

Aerial imagery specialist Nearmap (ASX:NEA) told investors that it is conscious of litigation by a consortium of rivals against its US subsidiary over a patent infringement allegation.

Owner and manager of Westfield shopping centres Scentre (ASX:SCG) reports a 27 per cent increase in collected gross rent cash collections from January to April this year to $802 million when compared to the same time in 2020.

Online beauty retailer Adore Beauty (ASX:ABY) reports a 47 per cent rise in revenue to $39.4 million in the March quarter for Q3 FY21 when compared to the prior corresponding period. Their active customers at the end of the quarter climbed 69 per cent to 687,000.

Under-pressure wealth manager AMP (ASX:AMP) has introduced cuts between 12 per cent and 22 per cent to its admin fees for superannuation and investment services.

Best and worst performers

The best-performing sector was Materials, up 0.79 per cent. The worst-performing sector was Information Technology, down 3.60 per cent.

The best-performing stock in the S&P/ASX 200 was QBE Insurance Group (ASX:QBE), closing 3.16 per cent higher at $10.78. It was followed by shares in BHP Group (ASX:BHP) and Insurance Australia Group (ASX:IAG).

The worst-performing stock in the S&P/ASX 200 was Nearmap (ASX:NEA), closing 23.31 per cent lower at $1.81. It was followed by shares in Appen (ASX:APX) and Kogan.Com (ASX:KGN).

Asian markets

Japan's Nikkei has gained 1.80 per cent.
Hong Kong's Hang Seng has gained 0.41 per cent.
China's Shanghai Composite has lost 0.11 per cent.

Commodities and the dollar

Gold is trading at US$1793.89 an ounce.
Iron ore is 2.0 per cent higher at US$192.54 a ton.
Iron ore futures are pointing to a rise of 6.54 per cent.
Light crude is trading $0.01 lower at US$63.30 a barrel.
One Australian dollar is buying 77.46 US cents.