Zip Co falls 11%, Spark jumps 7.8% before trading halt: ASX closes 0.3% higher

Market Reports

by Lauren Evans

The Australian share market closed 0.3 per cent or 23 points higher at 7,355, helped by Utilities, Consumer Discretionary and Materials. 

All sectors closed higher except Information Technology, down 2.5 per cent. Buy now pay later stocks tumbled on speculation of Apple’s move to break into the sector. The upcoming service, known internally as Apple Pay Later, will allow consumers to pay for any Apple Pay purchase in instalments. Zip Co (ASX:Z1P) closed 11.4 per cent lower as the worst-performing stock. Afterpay (ASX:APT) closed 9.6 per cent lower.

Of the major banks, ANZ and Westpac both closed lower, ANZ (ASX:ANZ) down 0.5 per cent and Westpac (ASX:WBC) down 0.1 per cent. NAB (ASX:NAB) rose 0.08 per cent after it announced it was in talks with Citi regarding acquiring Citi's consumer banking division in Australia.

Spark Infrastructure Group (ASX:SKI) rose 7.8 per cent before going into a trading halt this afternoon.

Seven Group's (ASX:SVW) interest in Boral (ASX:BLD) has increased to 48.41 per cent. Seven Group closed 3.5 per cent higher at $22.86. Boral is trading 0.4 per cent lower at $7.36.

Across the Tasman, New Zealand's central bank said it will reduce stimulus for the economy as inflation pressures rise and growth rebounds from the pandemic. The Reserve Bank of New Zealand said it will halt its purchases of New Zealand government bonds, which had helped to keep wholesale interest rates low, by July 23. Their cash rate was left unchanged at a record low of 0.25 per cent.

Local economic news

The Westpac-Melbourne Institute Index of consumer sentiment rose by 1.5 per cent to 108.8 in July from 107.2 in June. Chief economist Bill Evans said "confidence has held up overall despite a sharp fall in NSW as other states – notably Victoria and Western Australia – recorded strong bounce-backs from COVID-related disruptions in June".

The Australian Bureau of Statistics released overseas travel numbers for June. A total of 103,500 estimated arrivals, a decrease of 12,200 compared with May. June 2021 arrivals decreased 93.4 per cent when compared to pre-Covid-19 levels in June 2019.

Company news 

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EROAD (ASX:ERD) has entered into a conditional agreement to acquire Coretex for up to NZ$188.3m.

NBN Co (nbn) has awarded Downer EDI (ASX:DOW) two contracts with an estimated value of over $220 million over two-and-a-half years. The contracts will commence in July 2021.

Following a review of operations, the board of Praemium (ASX:PPS) has recommended divestment of the company's international operations. Praemium has received interest from potential buyers, and Deloitte Corporate Finance has been appointed to manage the sale process.

humm group (ASX:HUM), a developer of consumer finance products, has entered into a joint venture with Red Bird Ventures, a subsidiary of Westpac New Zealand, to bring buy now pay later product bundll to the New Zealand consumer market.

Austin Engineering (ASX:ANG), a supplier of customised mining equipment with operations in Australia, Asia and the Americas, has appointed David Singleton as CEO and Managing Director, effective from 14 July 2021. On 17 May 2021, the company had announced the retirement of previous CEO, Peter Forsyth.

AngloGold Ashanti (ASX:AGG), a South African-based gold miner with projects across nine countries, has submitted an acquisition proposal to the board of Corvus Gold.

Liontown Resources (ASX:LTR) has announced a $52 million capital raise for development of its key Kathleen Valley Lithium-Tantalum Project.

Futures

The Dow Jones futures are pointing to a fall of 67 points.
The S&P 500 futures are pointing to a fall of 8 points.
The Nasdaq futures are pointing to a fall of 7 points.
The SPI futures are pointing to a rise of 23 points when the market next opens.

Best and worst performers

The best-performing sector was Utilities, up 3.4 per cent. The worst-performing sector was Information Technology, down 2.7 per cent.

The best-performing stock in the S&P/ASX 200 was Spark Infrastructure Group (ASX:SKI), closing 7.8 per cent higher at $2.48. It was followed by shares in Blackmores (ASX:BKL) and Ramelius Resources (ASX:RMS).

The worst-performing stock in the S&P/ASX 200 was Zip Co (ASX:Z1P), closing 11.4 per cent lower at $7.32. It was followed by shares in Afterpay (ASX:APT) and Lynas Rare Earths (ASX:LYC).

Asian markets

Japan's Nikkei has lost 0.3 per cent.
Hong Kong's Hang Seng has lost 0.5 per cent.
China's Shanghai Composite has lost 0.6 per cent.

Commodities and the dollar

Gold is trading at US$1813.91 an ounce.
Iron ore is 0.3 per cent higher at US$218.48 a ton.
Iron ore futures are pointing to a rise of 0.7 per cent.
Light crude is trading $0.17 lower at US$74.52 a barrel.
One Australian dollar is buying 74.59 US cents.

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