Aussie shares are slipping for a second day and for the third time this week, with the ASX 200 falling by 0.7 per cent at lunch. Losses from healthcare, consumer discretionary, property, energy and mining stocks are weighing most heavily.
The US sharemarket fell by as much as 0.9 per cent last night, slumping to a three-month low and puts the Dow Jones on track for its sixth straight weekly decline. In the absence of a 5.5 per cent rally over the next two sessions, the Dow Jones is on track to head backwards in May for the first time since December.
One of the catalysts for the selling in the US has been a drawn-out trade war with China and concerns of slower global growth. On May 6, President Trump threatened to ramp up tariffs on China and on May 10 followed through on those threats. The US more than doubled tariffs on $200bn of Chinese goods (from an initial 10 per cent to 25 per cent). China wasted no time to retaliate, raising tariffs on around $60bn of US goods. This has pushed both superpowers further away from striking a trade deal.
Lynas (LYC) remains one of the better performers this week. Media reports that China is ready to use its dominant position in rare earth minerals to hit back at the US seems to have helped the stock. LYC is up by more than 20 per cent this week.
The worst performer on the local market is Costa Group (CGC) which is down by 20 per cent. Australia’s largest fruit and vegetable grower has cut its earnings forecasts for the year. CGC said it is ‘…facing a deteriorating operating environment on a number of fronts which taken collectively are likely to impact the (calendar) full year result.’ CGC has updated its guidance of an EBITDA range of $140-$153m.
Bendigo & Adelaide Bank (BEN) has appointed Jacqueline Hey as its next Chair. Ms Hey was the CEO of Ericsson in the UK and Australia and is currently a non-executive director of Qantas (QAN), AGL Energy (AGL) and Cricket Australia.
Mirvac (MGR) has completed a $750m share placement announced to the market yesterday. It expects the raising to help fund projects, repay debt and replenish funding for its existing development pipeline. MGR is down 2.7 per cent as the funds were raised at a discounted price.
Orica (ORI), Premier Investments (PMV), CSR, Ruralco (RHL), TNE are all ex-dividend and are down by between 1 and 3.5 per cent.
On the economic front, business investment fell by 1.7 per cent in the March quarter (consensus was for a 0.5 per cent lift). However investment expectations have jumped by 12.8 per cent for 2019/2020 which is the biggest rise in seven years.
Dwelling approvals fell by 4.7 per cent in April, with private sector houses down 2.6 per cent.
1.7bn shares have changed hands so far today worth a well above average $2.6bn. 378 stocks are up, 595 are down and 372 are unchanged.
Published by CommSec