Aussie shares are fading from a better start, with the ASX 200 sliding by 37pts or 0.5 per cent to 6,567, with most sectors losing a little ground at lunch. While this marks the third straight session of losses, the Aussie market is still up by close to 11 per cent in November and remains on track to be the best month since March 1988 for the local bourse. Much better than expected vaccine news, the reopening of some borders and the US election uncertainty easing have helped markets lift strongly.
Losses from the big banks, gold miners, Treasury Wine Estates (TWE), Materials and Consumer Discretionary companies are weighing most heavily on the market. Gains in Healthcare, Tech and some Telcos are helping offset a portion of those falls.
Fortescue Metals (FMG) is up slightly as the iron ore price lifts to a more than six-year high. This is primarily thanks to robust demand from China’s property, infrastructure and manufacturing industries together with a slight drop in China’s iron ore stockpiles at ports.
Coal producers on the other hand are struggling as trade tensions with China weigh on the commodity and its producers. Whitehaven (WHC) is down 6.5 per cent while New Hope (NWC) is down 5.4 per cent. While China is largely reliant on iron ore imports, it is mostly self-sufficient in coking coal (coal used to make steel). China’s mines supply around 80 per cent of its coal requirements.
Gold producers continue to underwhelm, as markets have grown more optimistic recently. The price of gold fell by 1.3 per cent to US$1781.90 per tonne on Friday.
Treasury Wine Estates (TWE) is down 7 per cent due to trade tensions with China, which have ramped up over the past week. China has taken certain anti-dumping measures, which TWE warned would have a significant impact on the Australian wine industry. TWE said that demand for its portfolio of wines in China will be extremely limited while these new measures remain in place. It plans to redirect its Penfolds high-end wines from China to other Asian countries, Australia, the US and Europe. China has recently accounted for approximately two thirds of its profits in Asia and 30 per cent of total profits.
Select Harvests (SHV) is down 6 per cent after handing down its latest FY20 earnings. Net profit fell to $25m (FY19: $53m) despite a lift in almond production. Near record water costs, lower almond prices and COVID-19 has impacted the group’s result.
Kathmandu (KMD) is down 4 per cent after the adventure retailer’s CEO Xavier Simonet announced his resignation after 5.5 years with the company. Mr Simonet will remain with KMD through this sixmonth notice period or until the Board decides to release him.
2.3bn shares have changed hands so far today worth $2.7bn. 589 stocks are up, 625 are down and 370 are unchanged.
Published by CommSec