Energy drags, RBA holds rates & sticks to taper plan: ASX closes 0.2% lower

Market Reports

by Lauren Evans

The Australian share market continued its downward trend. At the closing bell, the ASX was 0.2 per cent or 17 points lower at 7,475.

Afterpay continued solid gains, closing 12.1 per cent higher following the acquisition with Square. Tech finished as best performer for the second day in a row, up 4.4 per cent, while Banks, Miners and Energy stocks closed lower. 

Major banks Commonwealth (ASX:CBA) and Westpac (ASX:WBC) closed 1 per cent lower. NAB (ASX:NAB) closed 0.9 per cent lower and ANZ (ASX:ANZ) closed 0.6 per cent lower. 

Energy supplier Santos (ASX:STO) closed 1.4 per cent lower following an acquisition in regards to the Mahalo gas project. Woodside Petroleum (ASX:WPL) closed 1.6 per cent lower and Oil Search (ASX:OSH) closed 1 per cent lower. 

Mining giants BHP (ASX:BHP) and Fortescue Metals (ASX:FMG) closed 1.6 per cent lower while Rio Tinto (ASX:RIO) closed 0.7 per cent lower.

Travel stocks were also amid the decline. Australia’s largest airline Qantas (ASX:QAN) closed 1.2 per cent lower, following a stand down of 2500 frontline workers due to the Sydney lockdown. Sydney Airport (ASX:SYD) closed 0.8 per cent lower. 

In headlines, Credit Corp and Centuria Office REIT released their full years results for financial year 2021. Credit Corp (ASX:CPP) closed 0.1 per cent higher and Centuria Office (ASX:COP) closed 1.3 per cent lower. 

The worst-performing stock  was PointsBet Holdings (ASX:PBH), closing 11.2 per cent lower following completion of the entitlement offer to raise $81 million.

NSW recorded 199 new Covid-19 cases, Queensland recorded 16 new cases and Victoria recorded 4 new cases.

Local economic news

Today the RBA met and the Board has decided to maintain the cash rate target at 10 basis points and the interest rate on exchange settlement balances of zero per cent, maintain the target of 10 basis points for the April 2024 Australian government bond and continue to purchase government securities at the rate of $5 billion a week until early September and then $4 billion a week until at least mid November.

ANZ-Roy Morgan consumer confidence increased slightly by 1.1pts to 101.8 this week after lockdowns in Melbourne and Adelaide ended and Australians were advised of vaccination targets to achieve to avoid future lockdowns.

Consumer Confidence is well below the 2021 weekly average of 110.3, however it remains 13.2 points higher than the same week a year ago, August 1/2, 2020 (88.6).

There were mixed fortunes for Consumer Confidence around the country this week with increases in Melbourne, up 2pts (+2 per cent) and Adelaide up 3pts (+2.9 per cent) which ended their lockdowns while there was a decline in Sydney, down 7pts (-7.0 per cent) which had its lockdown extended for another month.

Australian Bureau of Statistics released their building approvals and lending indicators for June.

Lending indicators posted new loan commitments which fell 1.6 per cent for housing, 12.6 per cent for personal fixed term loans and 19.6 per cent for business construction (typically a volatile series).

Building approvals posted a seasonally adjusted estimate for total dwellings approved which fell 6.7 per cent in June. Private sector houses fell 11.8 per cent, while private sector dwellings excluding houses rose 0.8 per cent. The value of non-residential building approved fell 3 per cent.

Company news

Please join us for Stocks of the Hour here. 

Financial services provider Credit Corp (ASX:CCP) has posted an 11 per cent increase in net profit over the prior year, to $88.1 million at the end of FY21.

News Corp (ASX:NWS) set to acquire the Oil Price Information Service (OPIS) and related assets from S&P Global and IHS Markit for $1.15 billion.

Australia's largest airline Qantas (ASXQAN), reports 2,500 frontline employees stood down for an estimated two months in response to ongoing Covid-19 outbreaks.

Online wagering platform PointsBet (ASX:BHP) has completed its institutional entitlement offer, raising $81 million at $8.00 per share.

Mercury NZ (ASX:MCY) has acquired Tilt Renewables’ NZ operations, following an agreement signed in March.

Centuria Office REIT (ASX: COF) has announced pleasing full year results, with $102.2 mil funds from operations, a statutory net profit of $76.9 mil and 98.3 per cent average rent collection throughout FY21. 

Futures

The Dow Jones futures are pointing to a rise of 123 points.
The S&P 500 futures are pointing to a rise of 13 points.
The Nasdaq futures are pointing to a rise of 36 points.
The SPI futures are pointing to a fall of 6 points when the market next opens.

Best and worst performers

The best-performing sector was Information Technology, up 4.4 per cent. The worst-performing sector was Energy, down 1.4 per cent.

The best-performing stock in the S&P/ASX 200 was Afterpay (ASX:APT), closing 11.4 per cent higher at $127.85. It was followed by shares in Zip Co (ASX:Z1P) and Chalice Mining (ASX:CHN).

The worst-performing stock in the S&P/ASX 200 was PointsBet Holdings (ASX:PBH), closing 11.2 per cent lower at $9.73. It was followed by shares in Whitehaven Coal (ASX:WHC) and Perseus Mining (ASX:PRU).

Asian markets

Japan's Nikkei has lost 0.6 per cent.
Hong Kong's Hang Seng has lost 0.3 per cent.
China's Shanghai Composite has lost 0.4 per cent.

Commodities and the dollar

Gold is trading at US$1810.56 an ounce.
Iron ore is 1.6 per cent higher at US$184.42 a ton.
Iron ore futures are pointing to a rise of 1.8 per cent.
Light crude is trading $0.06 lower at US$71.20 a barrel.
One Australian dollar is buying 73.97 US cents.

Are you a 708 sophisticated investor?

A sophisticated investor is defined under Section 708 of the Corporations Act (net assets of $2.5 million or annual incomes in excess of $250,000).

They are eligible to receive information regarding wholesale investment opportunities that are not available to regular or retail investors.

Please subscribe if you would like to be alerted to these types of opportunities.