ASX down 1.03% at noon: Australia Flash Composite PMI expands

Market Reports

by Peter Milios

The Judo Bank Flash Australia Composite PMI Output Index for September improved to 50.2 from August's 48.0, indicating a return to expansion in Australia's private sector.

Warren Hogan, Judo Bank's chief economic advisor, noted that economic and business activity rebounded in September, especially in the services sector. However, manufacturing activity remained sluggish, with indicators below the neutral 50 level.

Nevertheless, Hogan pointed out that Australia's manufacturing sector is stabilising, and there are no strong signs of a recession in that area for now. He cautioned that if economic data doesn't align with Reserve Bank forecasts, there may be further tightening measures later in the year, likely around Melbourne Cup day in early November.

At noon, the S&P/ASX 200 is 1.03 per cent lower at 6,992.50.

The SPI futures are pointing to a fall of 87 points.

Best and worst performers

The best-performing sector is Consumer Staples, up 0.07 per cent. The worst-performing sector is REITs, down 1.79 per cent.

The best-performing large cap is Pilbara Minerals (ASX:PLS), trading 3.27 per cent higher at $4.11. It is followed by shares in Treasury Wine Estates (ASX:TWE) and QBE Insurance Group (ASX:QBE).

The worst-performing large cap is IDP Education (ASX:IEL), trading 4.02 per cent lower at $22.45. It is followed by shares in South32 (ASX:S32) and Orica (ASX:ORI).

Asian markets

Asia-Pacific markets fell ahead of the Bank of Japan’s rate decision, which investors will be closely watching to determine if the central bank will make any change to its ultra-easy monetary policy

A poll of Reuters economists showed that economists all expect the BOJ to hold its benchmark policy rate at -0.1%.

BOJ Governor Kazuo Ueda has maintained that an ultra-easy monetary policy is needed until Japan sees a sustained inflation at 2%. Japan’s headline inflation figures have remained above this target since April 2022, with the latest reading coming in at 3.2% for August.

Japan’s Nikkei 225 fell 1.15% ahead of the BOJ decision, while the Topix slid 0.92%.

South Korea’s Kospi saw a smaller loss, dropping 0.87%, while the Kosdaq slipped 0.7%.

Futures for Hong Kong’s Hang Seng index stood at 17,585, also pointing to a weaker open compared to the HSI’s close of 17,655.41.

Company news

Next Science (ASX:NXS) announced the successful completion of the Next Science Share Purchase Plan Offer (SPP) and US Offer which opened on 1 September 2023 and closed on 18 September 2023. In response, Managing Director, I.V. Hall said, “the A$21.5m in total funds raised under the Placement, SPP and US Offer derisks Next Science’s balance sheet and ensures that we are well placed to fund the promotion of XPERIENCE™ research.” Shares are trading 8.16 per cent lower at 45 cents.

Netlinkz (ASX:NET) announced a capital raising the Company is undertaking to fund its initiatives over the next 24 months. This includes engagement with SpaceX as a global distributor/reseller of the “enterprise” Starlink satellite transponder and related sales and partnership arrangements with HGC Global of Hong Kong. Shares are trading flat at 0.6 cents.

Diverger Limited (ASX:DVR) has entered into a binding Scheme Implementation Agreement with Count (ASX:CUP), under which Count will acquire 100% of the fully diluted share capital in Diverger by way of a Scheme of Arrangement. The Scheme is unanimously recommended by the Diverger Board of Directors and is supported by Diverger’s largest shareholder, HUB24. Shares are trading 16.2 per cent higher at $1.04.

Commodities and the dollar

Gold is trading at US$1943.00 an ounce.

Iron ore is 3.9 per cent lower at US$119.85 a tonne.

Iron ore futures are pointing to a 0.1 per cent fall.

One Australian dollar is buying 64.15 US cents.

Peter Milios

Peter Milios is a recent graduate from the University of Technology - majoring in Finance and Accounting. Peter is currently working under equity research analyst Di Brookman for Corporate Connect Research.

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