Major banks sink, House prices at fastest growth since 1989: ASX tumbles 2% at noon

Market Reports

by Lauren Evans

As expected, the Australian sharemarket has tumbled this morning despite a stellar performance yesterday. This comes after Wall Street posted its worst monthly retreat in September since the start of the pandemic. At noon, the S&P/ASX 200 is 2.04 per cent or 149.9 points lower at 7182.3. The SPI futures are pointing to a fall of 145 points.

All sectors are in the red, led by the financial sector, down 2.8 per cent, with real estate behind, down 2.4 per cent. Consumer discretionary is next, down 2.3 per cent, then energy, down 2.1 per cent. Materials and health care are both 2 per cent lower while the remaining sectors are all over 1 per cent lower, except utilities, with the fewest losses, down 0.7 per cent. 

The worst-performing stock is Domino Pizza (ASX:DMP), trading 6.1 per cent lower. The best-performing stock is Silver Lake Resources (ASX:SLR), trading 3.9 per cent higher. 

Major banks have tumbled, led by Commonwealth (ASX:CBA), down 4.1 per cent per cent. Virgin Money (ASX:VUK) is down 5.8 per cent after updating the market yesterday about its digital strategy. BHP and Rio Tinto are sending mining stocks lower, with BHP down 2.3 per cent and Rio down 2.9 per cent, despite iron ore prices trading higher. After a mixed night on oil prices, Santos (ASX:STO) and Oil Search (ASX:OSH) are weighing, down 4 and 3.8 per cent. 

In headlines, ProMedicus (ASX:PME) is down 1 per cent, following a $40 million deal with US health care provider Novant. The company is also paying a dividend today along with several other companies.

Against the broader market, gold stocks are the only bright spots. Northern Star Resources (ASX:NST) is up 4 per cent while Evolution Mining (ASX:EVN) is up 3 per cent, following government approval for its underground project.

Local economic news

CoreLogic has issued its home value data for September with the headline named, “Australian housing values rising at the fastest annual pace since June 1989, but the monthly rate of growth continues to lose steam”. CoreLogic’s national home value index rose another 1.5 per cent in September, taking Australian housing values 17.6 per cent higher over the first nine months of the year and 20.3 per cent higher over the past 12 months. The annual growth rate is now tracking at the fastest pace since the year ending June 1989.

The monthly change in housing values remains positive across every capital city and broad rest of state region, with Hobart up 2.3 per cent and Canberra up 2 per cent, recording the largest growth, while Darwin is up 0.1 per cent. Perth index is up 0.3 per cent, recording the softest growth conditions across the capitals. Across regional Australia, regional NSW is up 2 per cent, regional Tasmania is up 1.7 per cent and Regional Queensland is up 1.7 per cent, led September’s capital gains.

Although growth conditions remain positive, it is becoming increasingly clear the housing market moved past its peak rate of growth in March when nationally dwelling values increased by 2.8 per cent. Since that time, the monthly rate of growth has eased back to 1.5 per cent.

AiGroup and IHS Markit released their purchasing managers' indexes figures for the manufacturing industry. Key findings included: Demand and output shrink amid Covid-19 disruptions, lead times lengthen while prices pressures remain elevated and business confidence improves in August.

The seasonally adjusted IHS Markit manufacturing purchasing managers’ indexTM  posted 52 in August, down from 56.9 per cent in July, to signal the fifteenth consecutive month of expansion. The rate of growth eased for the third consecutive month, however, and was below the survey average.

Australian Bureau of Statistics released their lending indicators for August, for new borrower-accepted finance commitments for housing, personal and business loans. In August it fell, 4.3 per cent for housing, 2.5 per cent for personal fixed term loans and 26.4 per cent for business construction.

Company news

Adelaide based cementer Adbri (ASX:ABC) has signed off on its deal to acquire the sand operations of Metro Quarry Group (MQG) in a 50/50 joint venture with Barro Group.

Medical imaging specialist Pro Medicus (ASX:PME) has inked a $40 million deal with North California health care provider Novant, marking its seventh major US contract in 18 months.

IPO 

West Cobar Metals (ASX:WC1) made their debut today on the ASX with an issue price of $0.20. The stock opened at $0.24, touched a high of $0.25 and a low of $0.22 and now trading at $0.23.

Best and worst performers

All sectors are in the red. The sector with the fewest losses is Utilities, down 0.7 per cent. The worst-performing sector is Financials, down 2.8 per cent.

The best-performing stock in the S&P/ASX 200 is Silver Lake Resources (ASX:SLR), trading 3.9 per cent higher at $1.39. It is followed by shares in Northern Star Resources (ASX:NST) and Whitehaven Coal (ASX:WHC).

The worst-performing stock in the S&P/ASX 200 is Domino Pizza Enterprises (ASX:DMP), trading 6.1 per cent lower at $150.71. It is followed by shares in Virgin Money UK (ASX:VUK) and Reece (ASX:REH).

Commodities and the dollar

Gold is trading at US$1754.80 an ounce.
Iron ore is 4.5 per cent higher at US$119.23 a ton.
Iron ore futures are pointing to a rise of 5.40 per cent.
One Australian dollar is buying 72.26 US cents.

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