Unemployment rate hits 10-year low, Polynovo tumbles 9%: ASX closes 0.3% lower

Market Reports

by Melissa Darmawan

The Australian sharemarket faded in the afternoon to close 0.3 per cent lower at 7,336 brushing off a record 10-year low unemployment rate of 4.9 per cent amid Covid-19 restrictions tightening in pockets of the country.

Losses were mainly across the board, led by Health Care, Technology and Property stocks with Materials and Utilities gaining while Consumer Discretionary closed flat.

Mining giants helped the index along with BHP (ASX:BHP) rose 1.1 per cent to $51.53 while Rio Tinto (ASX:RIO) added 2.2 per cent at $131.14 ahead of their operations report due tomorrow. Fortescue Metals (ASX:FMG) rose to its highest level since early this year, up 2.1 per cent to $25.72.

Safe-haven gold rose to a four week high followed from US Fed Chair Powell’s striking a dovish tone. Gold miners enjoyed the session with Northern Star (ASX:NST) up 2.1 per cent at $10.85 while Evolution Mining (ASX:EVN) closed 2.7 per cent higher at $4.95. Newcrest Mining (ASX:NCM) was not far behind adding 1.5 per cent at $27.01.

Major banks and technology stocks fell. Zip Co (ASX:Z1P) tumbled 5.6 per cent to $6.91 and Afterpay (ASX:APT) dropped 2.3 per cent to $104.56 as investors continue to react to the increased competition and news from big US tech giant, Apple and other rivals to break into the BNPL sector.

Looking to stateside’s economic outlook, U.S retail sales numbers for June, jobless claims and consumer confidence for July are slated while Fed Chair Powell will deliver his second day of testimony before Congress.

Local economic news

Australia’s jobless rate fell to 4.9 per cent in June, its lowest level since June 2011 dropping from May’s 5.1 per cent while 29,100 new jobs was added into the economy as per the Australian Bureau of Statistics. Participation rate remained at 66.2 per cent.

Company news

Kerry Stokes’ conglomerate Seven Group Holdings (ASX:SVW) has now hit 52.7 per cent in Boral (ASX:BLD) with an automatic two-week extension offering $7.40 per share for the building products company.

The nation’s largest airline hub Sydney Airport (ASX:SYD) slammed down the rubber duck stamp to reject the $22 billion takeover bid from a consortium of infrastructure investors.

Oil and gas giant Woodside Petroleum (ASX:WPL) reports a 15 per cent surge in sales revenue from the first quarter of 2021 of $1.285 billion despite its production falling 4 per cent, thanks to a recovery in oil prices.

Electrical investment manager Spark Infrastructure (ASX:SKI) has rejected a $5 billion takeover bid by private equity giant KKR and superannuation manager Ontario Teachers’ Pension Plan Board.

Fund Manager Pendal (ASX:PDL) saw a 5 per cent jump in funds under management in the June quarter after outflows of $700 million.

Futures

The Dow Jones futures are pointing to a fall of 54 points.
The S&P 500 futures are pointing to a fall of 3 points.
The Nasdaq futures are pointing to a rise of 20 points.
The SPI futures are pointing to a fall of 36 points when the market next opens.

Best and worst performers

The best-performing sector was Materials, up 1.4 per cent. The worst-performing sector was Health Care, down 1.4 per cent.

The best-performing stock in the S&P/ASX 200 was ARB Corporation (ASX:ARB), closing 7.2 per cent higher at $44.38. It was followed by shares in St Barbara (ASX:SBM) and Spark Infrastructure Group (ASX:SKI).

The worst-performing stock in the S&P/ASX 200 was PolyNovo (ASX:PNV), closing 8.7 per cent lower at $2.10. It was followed by shares in Zip Co (ASX:Z1P) and Nuix (ASX:NXL).

Asian markets

Japan's Nikkei has lost 1.2 per cent.
Hong Kong's Hang Seng has gained 1.02 per cent.
China's Shanghai Composite has gained 0.9 per cent.

Commodities and the dollar

Gold is trading at US$1831 an ounce.
Iron ore is 0.10 per cent higher at US$218.66 a ton.
Iron ore futures are pointing to a rise of 1.1 per cent.
Light crude is trading $0.78 lower at US$71.86 a barrel.
One Australian dollar is buying 74.83 US cents.

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