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Aussie shares have had a choppy start to the day, with markets digesting the latest coronavirus numbers from state premiers and the treasurer’s July economic update. At ~12:45pm AEST the ASX 200 is down by just 0.23 per cent and remains above 6,000pts.

Global markets were mixed last night with US stocks lifting by ~0.6 per cent while European equities lost ground after hitting fourmonth highs a day earlier. While markets celebrated some encouraging COVID-19 vaccine news and the extension to government support programs (JobKeeper and JobSeeker) earlier this week, markets are back in negative territory for a second day, with rising US-China-tensions not helping. Washington ordered the closure of the Chinese consulate in Houston due to accusations of economic espionage and visa fraud. Beijing has threatened to retaliate.

On the coronavirus front, Victoria has recorded another 409 new cases, while numbers rose in NSW to 19 over the past day. Treasurer Josh Frydenberg delivered his economic and fiscal update at 11am AEST this morning which initially pushed markets a little higher. The budget deficit for last financial year (2019-20) is estimated to be ~$85.8bn or 4.3 per cent of GDP. He has forecast a 2020-21 budget deficit of $184.5bn and expects the unemployment rate to peak at 9.25 per cent before Christmas (currently at 7.4 per cent).

Across the market, Commonwealth Bank (CBA), BHP, Rio Tinto (RIO), Fortescue Metals (FMG), some gold miners, telcos, CSL, Fisher & Paykel (FPH) and supermarket chains are holding the market back. Gains from property stocks, insurers and consumer discretionary businesses are standing out.

Two of our largest gold miners released their latest activity reports this morning. Newcrest Mining (NCM) posted a 7 per cent lift in June quarter gold production to 573,000 at an All in Sustaining Cost (AISC) of ~A$1,339 and a realised gold price of ~A$2,510/oz. This compares to a 31 per cent lift in production for the smaller Evolution Mining (EVN) to 218,000oz at a similar realised gold price (average price received for each ounce of gold sold) at a lower cost (AISC) of A$1,088 per ounce.

Santos (STO) production rose by 15 per cent to a record 20.6 mmboe (on March quarter). The result was driven by higher domestic gas production in WA, onshore production and higher equity interest in Bayu-Undaan (which is a site 500km offshore Darwin). However, as is the case with other energy companies, revenue has declined by 11 per cent over the quarter due to lower energy prices. STO shares are down ~30 per cent Year-to-Date.

3.6bn shares have changed hands so far today worth $3bn. 660 stocks are up, 463 down and 382 are unchanged.

Published by CommSec