Wall St falls in wild session: ASX to edge higher

Market Reports

by Melissa Darmawan

The Australian sharemarket is to edge higher following Wall St closing its third straight session in the red. The market downturn was triggered on the back of China’s regulators crackdown on cryptocurrency, warning financial institutions to not participate in any crypto-related business. Adding to the sell-off, the US Federal Reserve minutes were released which showed first signs that the central bank might tighten policy if the economy shows “rapid” progress. Companies related to Bitcoin saw the biggest declines with Tesla down 2.5 per cent, Coinbase tumbled 6 per cent and software company MicroStrategy, dived over 6 per cent adding to its 30 per cent monthly decline as the company’s primary treasury reserve is crypto. Energy and Material sectors led the declines as oil prices fell more than 3 per cent on concerns in the rising number of coronavirus cases in Asia dampening fuel demand due to the delay in the reopening of the economy. On a rosier note, Target rose 6.1 per cent after better than expected first quarter earnings. Across the Atlantic, European markets closed lower as investors digested UK’s inflation figures which notched its highest in 13 months. Meanwhile gold prices rose as US treasury yields lifted while back home, Nufarm (ASX:NUF) is set to release its half year results.

Figures from around the globe

Wall Street closed lower yesterday, the Dow Jones Industrial Average fell 0.5 per cent to 33,896. The S&P 500 lost 0.3 per cent to close at 4,116. The Nasdaq closed 0.03 per cent lower to 13,300.

European markets closed lower, London’s FTSE fell 1. 2 per cent, Paris lost 1.4 per cent and Frankfurt closed 1.8 per cent lower.

Asian markets, Tokyo’s Nikkei fell 1.3 per cent, Hong Kong’s Hang Seng was closed and China’s Shanghai Composite closed 0.5 per cent lower.

Taking all of this into equation, the SPI futures are pointing to a 0.1 per cent gain.

ASX 200

Yesterday the Australian share market closed 1.9 per cent lower at 6,932 to a six-week low as inflation fears rose as investors entertained the idea of an interest rate hike, with all sectors except Consumer Staples recorded losses of more than 1 per cent. In anticipation of the US nuclear deal with Iran which drove oil prices downwards saw Origin Energy (ASX:ORG) tumbled 4.9 per cent and AGL (ASX:AGL) dived 3.8 per cent. On a more brighter note, the best performing stock was artificial intelligence data provider Appen (ASX:APX) soared 17.4 per cent after news of a restructure and cost cuts. While on the technology front, EML Payments (ASX:EML) was the worst performing stock which plunged 45.6 per cent on concerns Irish regulators could impose significant restrictions on its European operations.

Local economic news

Today the Australian Bureau of Statistics is to publish the labour force data for April with economists looking closely at the figures to view the impact of the ending of JobKeeper at the end of March. Westpac group economists expect 10,000 jobs to be added to the economy with the unemployment rate to hold steady at 5.6 per cent.

Company news

Auckland Airport (ASX:AIA) chief executive Adrian Littlewood has advised the board of his intention to step down towards the end of this year after nearly nine years in the role. Mr Littlewood was appointed chief executive in 2012 after joining the company in 2009 from Spark New Zealand where he held several senior positions. After finishing at the company, Mr Littlewood plans to take an extended break before making any decisions about future roles. Shares in Auckland International Airport (ASX:AIA) closed 1.87 per cent lower at $6.81 yesterday.

Broker moves

Macquarie rates St Barbara (ASX:SBM) as an underperform with a price target of $1.80. The downgrade from a neutral follows the company’s reduced FY21 production guidance. The broker had expected a downgrade to their guidance but the update was weaker than anticipated though they believe there are a number of meaningful catalysts ahead that could reset the company’s production profile. Shares in St Barbara (ASX:SBM) closed 6.97 per cent lower at $1.74 yesterday.

Ex – Div

AusNet Services Ltd (ASX:AST) is paying 4.75 cents 40 per cent franked.
Kathmandu Hold Ltd (ASX:KMD) is paying 1.5748 cents fully franked.
Kelly Partners Group (ASX:KPG) is paying 0.33 cents fully franked.
Z Energy Ltd (ASX:ZEL) is paying 13.0281 cents unfranked.

Currencies

One Australian Dollar at 7:45 AM was buying 77.24 US cents, 54.73 Pence Sterling, 84.37 Yen and 63.45 Euro cents.

Commodities

Iron Ore has dropped 3.7 per cent to US$216.16.
Iron Ore futures are pointing to 7.9 per cent fall.
Gold has added $13.50 to US$1882 an ounce.
Silver has lost $0.31 to US$28.03 an ounce.
Oil was down $2.13 to US$63.36 a barrel.