Aussie shares are experiencing a third day of losses with the ASX 200 opening 30 points or 0.5% softer following a weak lead from Wall Street. The local market is being led lower by weakness in energy and material stocks with most sectors in the red. Gains in the consumer staples and some buying support for the financials have limited losses. Towards lunch, the ASX200 is 11pts or 0.2% lower at 5960pts.
Overnight, broader base metal prices fell back considerably with iron ore prices following suit. This has weighed on local mining stocks as BHP remains the biggest individual drag on the market in early trading as it slides 1.5%. The other major miners have not escaped the losses with Rio Tinto (RIO) down 1.6% and South32 (S32) has slipped 3%. Energy stocks are weaker despite a small 0.3% lift in Nymex crude oil overnight. Origin Energy has slipped 1.3% and Santos down 1.9%.
Financials are looking to snap its two-day losing streak with ANZ Bank (ANZ) leading the other major banks higher. ANZ is lifting 0.9%. Other significant gains are coming from Telstra (TLS) which is up 0.3%, and over 6% higher so far this week. Consumer staples are being boosted by supermarkets Woolworths (WOW) and Wesfarmers (WES) which are 0.3 and 0.5% higher respectively.
Incitec Pivot Ltd. (IPL) shares were 2.4% lower after announcing that the present contract to supply ammonium nitrate to BHP Billiton’s (BHP) iron-ore operations in Western Australia would not renewed when the agreement expires in November 2019. IPL said that there will be no financial impact in the 2018 and 2019 financial years, however the reduced volumes will see NPAT fall by up to $10 million in fiscal 2020 and $25 million in 2021 with only a modest impact beyond that.
TPG Telecom (TPM) shares rose 1.6% after updating investors at its AGM. The telco highlighted that the rollout of the NBN had hurt the company, but it is confident the launch of its mobile network will be a success. TPM said it was on track to deliver on its full year guidance for underlying EBITDA of between $800 million to $815 million, while capital expenditures are seen in the range of $270 to $310 million driven by the construction of its mobile networks.
The Aussie slumped after the reading on third quarter GDP came in below market expectations. The ABS reported that the Australian economy expanded at a rate of +0.6% in the September quarter compared to an estimate of +0.7%. The annualised rate of 2.8% in the third quarter, which was below the average of economist’s forecasts of 3.0%. A short time ago the local unit was down 0.4% at 75.80 US cents. So far, 2.4B units have traded hands worth $1.9B with 406 stocks higher, 604 lower and 356 unchanged.
Originally published by CommSec