Renewed China fears push miners over: ASX down 0.5% at noon

Market Reports

by Melissa Darmawan

Australian shares wiped out all of this week’s gains as miners fell on news that the country’s largest trading partner is faring worse than when the pandemic first emerged.

“Economic indicators in China have fallen significantly, and difficulties in some aspects and to a certain extent are greater than when the epidemic hit us severely in 2020” said Premier Li Keqiang in an emergency meeting with representatives from local governments, state-owned companies, and financial firms.

This comes as China’s annual growth target sits at 5.5 per cent compared to its full year growth of 2.2 per cent in 2020.

Fortescue Metals Group (ASX:FMG) fell 4.5 per cent to $19.76 while BHP (ASX:BHP) and Rio Tinto (ASX:RIO) are trading around 1.8 to 2.2 per cent lower respectively.

Whitehaven Coal (ASX:WHC) has been the worst performer, tumbling 9.3 per cent to $4.80, while New Hope (ASX:NHC) shares have fallen 11.8 per cent to $3.61 after the company posted weak production numbers in NSW and Queensland due to bad weather and labour shortages. Yancoal (ASX:YAL) is in a trading halt amid speculation following a report in The Australian that the company’s Chinese parent company is set buy out the remaining shares in the company.

Information tech has been the best-performing sector, pulled higher by Appen (ASX:APX). Shares in the data company soared 28 per cent after it announced a $1.2 billion takeover offer from Telus International. The $9.50 per share offer represents a huge 48 per cent premium to Wednesday’s closing price of $6.40.

Meanwhile, Westpac (ASX:WBC) has inked a $225 million deal with Mercer to divest its personal and corporate superannuation funds under its wealth brand BT along with the Advance Asset Management division. The transaction does not include the superannuation held on BT Panorama and Asgard platforms. Westpac shares are trading 1.1 per cent higher at $24.14.

There are a few winners. Sezzle (ASX:SZL) is up 6.1 per cent to 52 cents after soaring 17.6 per cent in the past three days. HRL Holdings (ASX:HRL) is up 11.11 per cent to 9 cents after also rallying 11 per cent in the same period.

Finally, Eden Innovations (ASX:EDE) has executed a three-year, bulk EdenCrete® supply agreement with Delta Industries who operates more than 30 ready-mix plants and sales yards in four US states. Eden shares are up 9.1 per cent to 1.2 cents.

At noon, the S&P/ASX 200 is 0.5 per cent or 38 points lower at 7,117.

The SPI futures are trading at a 17-point discount.

Local economic news

First quarter new capital expenditure fell by 0.3 per cent against forecasts of a 1.5 per cent increase, according to the Australian Bureau of Statistics. Buildings and structures fell by 1.7 per cent while equipment, plant and machinery grew by 1.2 per cent. Estimate 2 for 2022 to 2023 is $130.5 billion, 11.8 per cent higher than Estimate 1 for 2022 to 2023. This is another miss ahead of the gross domestic product figures due next Wednesday.

Commodities and the dollar

Gold is trading at US$1852.11 an ounce.
Iron ore is 2.2 per cent higher at US$133.40 a ton.
Iron ore futures are pointing to a fall of 3.4 per cent.
One Australian dollar is buying 70.86 US cents.

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics


Commodities and the dollar

Gold is trading at US$1852.11 an ounce.
Iron ore is 2.2 per cent higher at US$133.40 a ton.
Iron ore futures are pointing to a fall of 3.4 per cent.
One Australian dollar is buying 70.86 US cents.

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics
 

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