While Aussie shares have bounced off this morning’s lows, the ASX 200 is still down by 0.67 per cent to 5217 following heavy losses from the major banks. At its worst, the index was down by 2.4 per cent. US
markets gave back 4 per cent in gains in late trade, with the Dow Jones finishing 26pts or 0.12 per cent lower at the close.
Some signs the spread of the coronavirus has been slowing in hot spots like New York together with parts of Italy and Spain has helped pushed global markets higher in recent days. In coming days and weeks, any positive developments on the virus front, could provide hope that life might return to normal a little faster than expected. Airlines and cruiseliners rose strongly in US trade.
Locally, S&P cut Australia’s AAA credit outlook to negative because of the Government’s massive fiscal stimulus announced in recent weeks. S&P said ‘we could lower our rating within the next two years if the Covid-19 outbreak causes economic damage that is more severe or prolonged than what we currently expect”.
Banks are currently accounting for around half the market’s pullback. This follows a recommendation from APRA for banks and insurers to consider reducing their dividend payments during the outbreak. Bank of Queensland (BOQ) is down by 2.9 per cent after handing down a 10 per cent decline in HY profits and also becoming the first bank to announce the deferral of its decision whether or not to pay a dividend to investors.
Westpac (WBC), National Bank (NAB) and Macquarie (MQG) acknowledged APRA’s recommendations and said they would make a decision on dividends when they release earnings in May. The banks have different reporting periods and Commonwealth Bank (CBA) already paid an interim dividend to investors at the end of March. The other banks tend to pay out dividends around July each year.
QBE Insurance (QBE) has confirmed that it will still pay its final dividend for FY19 of $0.27 per share tomorrow as scheduled.
Treasury Wine Estates (TWE) is up around 9 per cent after announcing plans to spin-off its Penfolds business into a separate ASX listed company by the end of the 2021 calendar year. TWE CEO, Michael Clarke said that “Penfolds accounts for approximately 10 per cent of our volume, but well over half of our earnings”.
Cochlear (COH) has received expedited FDA approval in the US of a Remote Check solution for cochlear implants. This will allow people with a Cochlear Nucleus 7 Sound Processor to complete a series of hearing checks at home using a phone app. Results will be sent remotely to a clinic for review.
1.4bn shares have changed hands so far today worth $2.7bn. 470 stocks are up, 508 down and 279 are unchanged.
Published by CommSec