Aussie shares have given back all their gains at lunch, with the ASX 200 slipping by 19pts or 0.36 per cent to 5,135.5. This follows a 3.2 per cent lift on the open and a strong lead from Wall Street. The Australian sharemarket remains on track to have its best week of 2020, with the ASX 200 lifting by close to 8 per cent in just five days. The main risk moving forward continues to be a more drawn out COVID-19 pandemic, which would keep businesses closed and thousands of stood down employees at home.
On Friday, the market is being held back by property companies (including office and shopping mall owners), stocks in the consumer discretionary space (like Crown, Tabcorp and JB Hi-Fi) and a continued decline from the banks.
Very strong gains from resource companies is helping most. Energy stocks are doing particularly well as expected, following a 24.7 per cent surge in the oil price (its biggest one day gain on record). This followed President Trump tweeting that he expects Russia and Saudi Arabia to reach a deal on reducing oil supply. The President said that leaders of both nations have kicked off talks. This was quickly followed by a Russian government spokesman who denied the claims. An OPEC official commenting on the President’s comments said that “Trump is talking before his brain engages.” Nevertheless, the comments have pushed oil and energy stocks higher.
Harvey Norman (HVN) has decided to cancel its interim dividend of 12c per share and will save the company $149.5m. It blamed the decision on coronavirus uncertainty. HVN actually went ex-dividend on Thursday and slumped by around 7 per cent. The retailer’s leadership team has agreed to a 20 per cent pay cut.
Servcorp (SRV) – one of the world’s first providers of virtual offices – has made 100 people redundant and cut most salaries by 20 cent. The CEO took a 50 per cent pay cut for the time being.
Casino operator, SkyCity (SKC) is down 6.5 per cent and announced further cost saving initiatives as it complies with government requirements to shut its facilities. SKC is reducing its CAPEX and cutting Executive salaries. SKC has already stood down 90 per cent of its workforce. SKC operates casinos in New Zealand and Adelaide.
Treasury Wine Estates (TWE) is facing a class action over allegations of misleading conduct and continuous disclosure issues. The beverage company is denying all allegations of wrong doing. Its shares are up 2.5 per cent today but still down around 40 per cent this calendar year.
1.9bn shares have changed hands so far worth $3.8bn. 600 stocks are up, 473 down and 261 are unchanged.
Published by CommSec