Energy leads, RBA trims bond buying: ASX closes 0.7% lower

Market Reports

by Lauren Evans

The Australian sharemarket dropped into negative territory this afternoon, closing 0.7 per cent or 53.2 points lower at 7,262.

Energy was the best-performing sector, closing 1.5 per cent higher, while Communication Services remained the worst, down 2 per cent.

Oil Search (ASX:OSH) was the best-performing stock, up 4.6 per cent higher, while PolyNovo (ASX:PNV) was the worst-performing stock, down 8.8 per cent.

All four banks closed in the red. Westpac (ASX:WBC) was down 0.1 per cent following its announcement that it will sell its New Zealand life insurance to Fidelity life insurance for $373 million. Commonwealth Bank (ASX:CBA) was down 0.4 per cent while NAB (ASX:NAB) and ANZ (ASX:ANZ) both closed 0.1 per cent lower.

The cloud software Rhipe (ASX:RHP) closed 0.8 per cent lower following news about software management and cloud optimisation company Crayon proposing to acquire 100 per cent of shares in Rhipe.

Advanced Human Imaging (ASX:AHI) closed 2.7 per cent lower, following the conclusion of due diligence on the Physimax acquisition.

Elsewhere, HomeCo Daily Needs (ASX:HDN) was also down 2.7 per cent. The company announced the completion of their placement to raise $70 million for Town Centre Victoria Point shopping centre in Queensland. Mineral Resources (ASX:MIN) closed 0.3 per cent higher following the announcement that it secured a drilling rig for the conventional gas exploration well in Western Australia.
BHP (ASX:BHP) closed 0.8 per cent higher at $48.85. Rio Tinto (ASX:RIO) closed 0.6 per cent lower at $125.41.

Local economic news

The Australian Bureau of Statistics released their payroll jobs and wages figures for the first half of June. Payroll jobs rose by 0.3 per cent nationally in the fortnight to 19 June 2021, following a 0.8 per cent fall in the previous fortnight.

Bjorn Jarvis, head of labour statistics at the ABS said, “payroll jobs increased in every state and territory through the first half of June, ranging from 0.1 per cent in New South Wales and Western Australia to 0.6 per cent in the Australian Capital Territory. Payroll jobs in Victoria rose by 0.4 per cent in the fortnight to 19 June 2021, as the restrictions associated with its recent lockdown eased. This followed a fall of 2.1 per cent in the previous fortnight."

Reserve Bank of Australia (RBA) decided to keep cash rates at 0.1 per cent after their meeting today. The RBA will move to weekly $4 billion bond purchases until November, down from the $5 billion weekly rate under the second $100 billion quantitative easing program announced since the pandemic started last year.

Company news

Westpac (ASX:WBC) has announced that it has agreed with Fidelity Life Assurance Company to sell Westpac Life New Zealand and enter into an exclusive 15-year agreement for the distribution of life insurance products to Westpac’s New Zealand customers. The sale price of $373 million is expected to result in a post-tax gain on sale and add approximately 7 basis points to Westpac Group’s common equity tier 1 capital ratio.

HMC Funds Management (HMC), as responsible entity for HomeCo Daily Needs REIT (ASX:HDN), has announced the successful completion of the underwritten institutional placement announced on Monday, raising approximately $70 million through issuing around 48.3 million new ordinary units in HomeCo at an issue price of $1.45 per unit. The proceeds from the placement will be used to fund the acquisition of a 100% interest in the Town Centre Victoria Point shopping centre, located in Queensland.

Mineral Resources (ASX:MIN) has announced that its wholly owned subsidiary Energy Resources (ERL) has secured a drilling rig for the conventional gas exploration well Lockyer Deep 1, situated in the onshore Perth Basin, Western Australia.

The leading cloud software Rhipe (ASX:RHP) closed 0.8 per cent lower, following its news about the software management and cloud optimisation company Crayon, proposing to acquire 100 per cent of shares in Rhipe.

Advanced Human Imaging (ASX:AHI) has concluded its due diligence for the proposed acquisition of Israeli-based musculoskeletal assessment company Physimax Technologies. Physimax musculoskeletal capabilities empower athletes’ clinicians and individuals to independently perform functional movement assessments.

Futures

The Dow Jones futures are pointing to a rise of 25 points.
The S&P 500 futures are pointing to a fall of 2.8 points.
The Nasdaq futures are pointing to a fall of 29 points.
The SPI futures are pointing to a fall of 65 points when the market next opens.

Best and worst performers

The best-performing sector was Energy, up 1.54 per cent. The worst-performing sector was Communication Services, down 2.02 per cent.

The best-performing stock in the S&P/ASX 200 was Oil Search (ASX:OSH), closing 4.62 per cent higher at $4.08. It was followed by shares in Whitehaven Coal (ASX:WHC)

The worst-performing stock in the S&P/ASX 200 was PolyNovo (ASX:PNV), closing 8.75 per cent lower, following shares in Appen (ASX:APX) and Ramelius Resources (ASX:RMS).

Asian markets

Japan's Nikkei has gained 0.16 per cent.
Hong Kong's Hang Seng has lost 0.58 per cent.
China's Shanghai Composite has lost 0.88 per cent.

Commodities and the dollar

Gold is trading at US$1805.52 an ounce.
Iron ore is 1.80 per cent higher at US$221.82 a ton.
Iron ore futures are pointing to a rise of 2.79 per cent.
Light crude is trading $0.35 higher at US$76.71 a barrel.
One Australian dollar is buying 75.90 US cents.

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