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The tough start to the week continues for the Australian sharemarket, with the ASX 200 down by ~0.5 per cent to 5,324.9 following Monday’s 2.45 per cent decline. While Wall Street offered up a negative lead this morning, remarkable moves in oil prices have received most attention.

The price of oil for delivery in May turned negative for the first time, slumping by 306 per cent to –US$37.63 per barrel. Prices fell due partly to a serious lack of storage capacity in Cushing, Oklahoma which is a major storage facility in the US together with the fact the May contract expires tomorrow. Some would have been closing out or rolling contracts to June to avoid the physical delivery of the commodity next month. West Texas Crude for June delivery fell by a still significant 18 per cent to US$20.43 per barrel. Origin (ORG) is down 2 per cent, while Woodside (WPL) and Santos (STO) are shedding ~0.7 per cent.

Virgin Australia (VAH) has confirmed it is entering voluntary administration to restructure and refinance the business. VAH has been seeking financial support from State and Federal Governments. VAH
last traded on 9 April before its shares were halted and then suspended. VAH shares are down 42 per cent Year-to-Date.

Webjet (WEB) released a short ASX note saying that it ‘…does not have a material financial exposure to Virgin should an administrator restructure the airline or elect to cease trading’. WEB shares are only down 0.8 per cent today but are down 75 per cent so far this calendar year.

BHP said that March quarter production for the miner declined for petroleum, copper, iron ore and its coal products (vs December quarter). The world’s largest mining company has kept production guidance for the 2020 financial year unchanged for most of its products.

Premier Investments (PMV) will keep its retail stores closed until at least 11 May 2020. Its stores have been shut since late March due to COVID-19. PMV is down 2.2 per cent. Oil Search (OSH) production rose by 5 per cent over the March quarter, however revenue slumped due partly to the timing of shipments and a 20 per cent decline in oil prices.

Metcash (MTS) has completed its $300m institutional share placement at a discounted price of $2.80. Shares in the distributor of groceries to IGA supermarkets are down 9.5 per cent to $2.75. Gold stocks are standing out at lunch as markets turn defensive. Regis (RRL), Northern Star (NST), Evolution (EVN) and Newcrest (NCM) are down by as much as 6 per cent.

According to the ABS’s new weekly update on jobs and wages in Australia, people in their 20s are the largest group in COVID-19 job losses, for whom employment decreased by 9.9 per cent. According to the Head of Labour Statistics at the ABS, Bjorn Jarvis “Tasmania and Victoria had the largest decreases in jobs, down 7.3 per cent and 6.8 per cent.”

1.8bn shares have changed hands on Tuesday worth $2.5bn. 324 stocks are up, 741 are down and 286 are unchanged.

Published by CommSec