The local market has fallen back into the red after a buoyant start to Wednesday’s session. The ASX 200 had rallied as much as 31 points or 0.5% after the first hour of trade but quickly shed those gains following news that Queensland will be closing its border to greater Sydney, declaring it a new hotspot, and sharp contraction in June quarter inflation. The benchmark index is down 14 points or 0.23% to 6,007.
There was early enthusiasm for financials, which was providing the market with plenty of support. The big four banks were up roughly 2-3% after a release from financial services regulator, the Australian Prudential Regulation Authority (APRA) easing its stance for financial institutions to pay out dividends this year. APRA is now satisfied with institutions to pay up to 50% of its earnings in capital distributions, while conducting stress testing, where before it leaned towards deferring payments. The major lenders are still firmer by ~1% each.
Losses have been heaviest among resources and tech stocks. Gold miners are mostly trading in the red even as the price of the precious metal remains near all-time highs. St Barbara (SBM) is sliding 6.3% after its June quarter update underwhelmed investors this morning, even as gold production and its realised gold price lifted on the previous quarter.
Independence Group (IGO), a nickel and gold mining company based in WA, is faring even worse, down 12.8% on its quarterly activities report. Guidance for FY21 disappointed investors most as well as higher cost expectations.
CIMIC (CIM) shares are a touch higher as it looks to sell a 50% stake in its mining services subsidiary, Thiess. It is currently in talks with a UK based firm with talks expected to conclude in the coming weeks. If the deal goes ahead, CIM says it will help the company maintain its strong balance sheet but also help Thiess’ continued growth.
Even with the biggest fall in consumer prices (inflation) in 89 years, a decline of 1.9% in the June quarter, the number was mostly expected which has led to the Aussie dollar holding around 71.6 US cents even with fluctuations immediately after the numbers were released.
Published by CommSec