Aussie shares have faded from a better start and are flat at lunch as market’s focus on issues overseas. The ASX 200 has fallen over the prior three days and remains on track to have its worst month since August 2015. Although October tends to be a solid month for markets thanks partly to billions being paid out in dividends, this has been overshadowed by geopolitical tensions.
Last night the European Commission rejected Italy’s budget plans as it failed to meet its strict guidelines for ultimately keeping debt in check. The US market fell by 0.5 per cent making it the 12th time in 14 days it has lost ground. Movements in China’s markets will receive attention in coming hours following a 2.5 per cent tumble on Tuesday.
Gains from the banks, gold stocks and bond proxies are helping to offset the losers today. Newcrest Mining (NCM) is up 1 per cent thanks to a lift in the precious metal’s price overnight and a solid quarterly update.
Energy stocks are slumping and by far the worst performers following a 4 per cent slide in the oil price overnight. Saudi Arabia said it could supply more oil to the market, offsetting a shortfall once US sanction on Iran take effect next month together with concerns centred around slower growth in China.
Bellamy’s (BAL) is down 8 per cent after warning of a 10-15 per cent drop in profits over 1H19. The Tasmania based infant formula maker will need to use up existing inventory ahead of a product refresh over the second half and also faces challenges in its key Chinese market. A2 Milk (A2M), Bubs (BUB) and Treasury Wine Estates (TWE) are sliding at lunch.
WorleyParsons (WOR) is down 6 per cent. The engineering group has resumed trade after spending the last two days raising funds to help pay for the purchase of $4.6bn in assets from a rival with a big US footprint.
Bank of Queensland (BOQ) is down by almost 4 per cent after trading ex-dividend for its 38c per share distribution.
Seven Group (SVW) is down 3 per cent. The supplier of Caterpillar equipment in parts of China and Australia is pulling back following a disappointing quarterly update in the USovernight.
1.9bn shares have changed hands so far today worth $2.2bn. 414 stocks are up, 563 are down and 337 are unchanged.
Published by CommSec