The Australian sharemarket has had a choppy session so far ahead of the Reserve Bank’s highly anticipated monthly meeting this afternoon. The ASX 200 was up early for the third straight day, however is now down at midday. Losses from miners, banks and stocks trading ex-dividend are the main weights. This follows improvements across most major European markets as both the US and Canadian bourses were shut for holidays.
Iron ore mining companies are struggling most as expected. This follows Fortescue (FMG) and BHP trading ex-dividend for record distributions in recent days and a 9.3 per cent tumble in the iron ore price. Iron ore prices have fallen by ~$101 or 44 per cent since hitting a record high in mid-May. Steel output cuts in China have weighed heavily on Australia’s largest export.
The major banks have also joined the miners’ push lower, with the big four slipping by as much as 1 per cent.
With the profit reporting season behind us, a number of companies are trading ex-dividend, including Sonic Health (SHL), Origin (ORG), Iluka (ILU), BlueScope (BLS), IOOF (IFL), Amcor (AMC), GWA and IGO. Most are coming under pressure at midday.
Oz Minerals (OZL) and Mineral Resources (MIN) will both pay eligible investors dividends today. On Wednesday no less than 15 companies are set to trade ex-dividend, including AVJ, AX1, ASB, BKL, ADH, BXB, MPL, SEK and SBM.
Midas Mineral (MM1) listed at 11am AEST today, with the mineral exploration company lifting by 20 per cent early. MM1 is focused on WA. HealthCo Healthcare & Wellness (HCW) is down 1.6 per cent. The fund manager, which invests in medical assets like private and maternity hospitals, rose by 16 per cent on its ASX debut Monday.
The Reserve Bank holds its monthly meeting today and will be closely watched by economists and analysts. While interest rates are likely to remain low for some time, the RBA’s commentary around bond buying will receive most attention. The bond buying program has had the effect of keeping borrowing costs low during the pandemic. The RBA has continually reiterated its intention to start gradually reigning in some of its bond buying from this month. Confirmation of this today or a potential delay/reversal to that decision due to lockdowns will be important this afternoon at 2:30pm AEST.
2.9bn shares have changed hands so far worth $2.4bn. 619 stocks are up, 679 down and 378 are unchanged.
Published by CommSec