Dow Jones snaps 5-day winning streak, tech drags on inflation jitters: ASX to dip

Market Reports

by Melissa Darmawan

The Australian share market is to fall at the open following Wall St closing in the red. Inflation fears continued to be front of mind for investors, as rotation out of growth stocks and technology names into cyclical stocks which benefit from the reopening of the economy occurred ahead of inflation figures due on Wednesday. Meanwhile, Facebook tumbled over 4 per cent while Google-parent Alphabet fell 2.6 per cent after Citi downgraded its rating to a neutral from a buy on concerns that digital advertising growth is to slowdown. Across the Atlantic, mining stocks rose to decade highs as iron ore prices rose 8 per cent while investors saw oil prices dip into the red after news of one of the largest pipelines in the US remained closed following a cybersecurity attack. Back home, Aussies are preparing themselves for the Federal Budget.

Figures around the globe

Wall Street closed lower yesterday, the Dow Jones Industrial Average fell 0.1 per cent to 34,743. The S&P 500 fell over 1 per cent to close at 4,188. The Nasdaq dropped 2.6 per cent to 13,402.

European markets closed mixed, London’s FTSE fell 0.1 per cent, Paris and Frankfurt both closed flat.

In Asian markets, Tokyo’s Nikkei added 0.6 per cent, Hong Kong’s Hang Seng lost 0.1 per cent while and China’s Shanghai Composite 0.3 per cent higher.

Taking all of this into equation, the SPI futures are pointing to a 0.7 per cent fall.

ASX 200

Yesterday, the Australian share market closed 1.3 per cent higher at 7,173 on the eve of the Federal Budget thanks to the surging iron ore price. Lithium, gold and iron ore miners had a ball in the session. Mining giants BHP and Rio Tinto set all time highs, Fortescue Metals closed 8 per cent higher, Evolution Mining added 6 per cent while Pilbara Minerals (ASX:PLS) won the best performing stock soaring 10.6 per cent after its announcement of "exceptional" drill results. The only sector in the red was Utilities.

Local economic news

Today ANZ and Roy Morgan will publish its weekly consumer sentiment report along with the ABS’ weekly payroll figures for the week ending 24 April.

Tonight at 7.30pm, the government will pass down the Federal Budget. It’s expected that the deficit is smaller on a stronger economy.

In company news that broke after market close 

Kerry Stokes’ conglomerate Seven Group Holdings (ASX:SVW) has launched a $8 billion takeover for Boral (ASX:BLD) at $6.50 per share, matching the closing price of the building supplies company. The offer was structured to increase its interest in Boral to around 30 per cent from its already 23.2 per cent stake in the company. Seven Group was unable to legally buy more shares in Boral until October, resulting the company to launch a full takeover. This offer comes only one month after Seven holdings exhausted its “creep” provision, where it could only increase its shareholding by 3 per cent every six months. Shares in Seven Group Holdings (ASX:SVW) closed 0.43 per cent higher at $21.15 yesterday.

Broker moves

Citi rates Goodman Group (ASX:GMG) as a buy with a target price of $22.10. The company’s third quarter update highlighted to the broker its improving operating conditions which saw better than expected rental growth and occupancy. The broker sees the company’s unchanged FY21 guidance as conservative, though believes in a strong growth outlook beyond this raising its target price from $21. Shares in Goodman Group (ASX:GMG) closed 1.51 per cent higher at $19.53 yesterday.

IPOs

Keep an eye out for recruitment platform company Hiremii (ASX:HMI) pencilled in to make their debut today after raising $6 million. The company focuses on an artificial intelligence tool to shortlist candidates with employer’s needs with the aim to disrupt the recruitment sector.

Ex-Div

United Overseas Australia (ASX:UOS) is paying 2 cents unfranked.

Currencies

One Australian Dollar at 7:50 AM was buying 78.33 US cents, 55.49 Pence Sterling, 85.28 Yen and 64.56 Euro cents

Commodities

Iron Ore has rallied 8.6 per cent to US$230.56.
Gold has added $6.30 to US$1838 an ounce.
Silver has gained $0.02 to US$27.49 an ounce.
Oil was up $0.02 to US$64.92 a barrel.
 

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