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The Aussie market has started the new week well in the red with the ASX 200 slumping by 146pts or 2% to 7,222 near midday. The index is on track for its worst daily decline since February 26 this year where it dropped 2.35%. Even with today’s falls, the ASX 200 is still 0.9% higher so far in June and has risen 9.6% in 2021 so far.

Today’s losses follows a weak lead from US markets over the weekend. The major indices on Wall Street fell as much as 1.6% on concerns that US interest rates could begin to lift sooner than expected as the economy continues to show strong signs of recovery.

There is red across the board locally as all sectors trade in negative territory. Financials are easily the worst performers with significant declines across the big four banks. Commonwealth Ban (CBA) is sliding 4.5% and is wiping 26 points off the ASX 200 index on its own. The bank also announced it has agreed to sell its general (home & motor) insurance business to South African based insurance group, Hollard Group, for $625 million upfront. The remaining big four lenders are down at least 2.6% each.

Resources are another drag on the market with the materials and energy sectors both down ~1.7% each.
Commodity prices were mixed over the weekend with oil prices rising but metals generally weaker. Rio Tinto (RIO) is 2.6% weaker while Fortescue Metals (FMG) falls 2% and BHP is down 1.7%.

In company news, electricity network operator, AusNet (AST) is 3% softer as it reviews underpayments made to employees. AST has made a voluntary disclosure to the Fair Work Ombudsman (FWO) and is unsure of the financial impact for FY22.

Boral (BLD) has agreed to sell its North American building products business to Westlake Chemical Corp. for US$2.15 billion or ~A$2.9 billion. BLD is yet to determine how to distribute surplus funds from the sale. BLD shares are down 0.3%.

The Aussie dollar remains near its lowest levels of the year against a stronger USD. The local unit now buys 75.01 US cents having fallen to a low near 74.8 US cents.

Published by CommSec