The Australian sharemarket has been aggressively sold off in early trade on Thursday. At the worst levels of the morning the Index was down 154 points or 2.3 per cent to 6,442. The follows steep falls overnight for US and European stocks in response to escalating concerns around slowing global growth. The Dow Jones Index was a noteworthy for its 800 point fall, marking the worst fall since October last year. US investors reacted to further declines in long term interest rates, which saw long term interest rates fall below short term rates, or an inversion of the yield curve – historically an inverse yield curve has signalled the increased likelihood of a recession.
Every sector measured by the ASX is lower at lunchtime, with the exception of gold stocks, which have risen as investors favour safe havens. Energy and Technology shares are experiencing the steepest falls with Santos, Woodside, Beach Energy and Oil Search, as well as Wisetech Global, Afterpay, Appen and Xero coming under the most pressure. Evolution Mining (EVN) led the charge, up 14 cents or 2.8 per cent to $5.31 after releasing a solid full year result and a large increase to their dividend. St Barbara (SBM) has also rallied with a gain of 12 cents or 3 per cent to $3.78.
Thursday has played host to one of the busiest days of the month in terms of companies reporting earnings results. Orora Ltd (ORA) and Cleanaway Waste Management (CWY) have both disappointed the market with poor results. Orora Ltd (ORA) has fallen 49 cents or 15.3 per cent to $2.71 after reporting its first fall in statutory earnings since li sting on the ASX in late 2013. Cleanaway Waste Management (CWY) surprised the market with a lower than expected result, although they did flag that they expect all business units to increase earnings in FY20. CWY shares were lower by 22 cents or 9.2 per cent at $2.16.
Telstra Corporation (TLS) reported a 40 per cent fall in full-year profit to $2.15 billion and pointed to another earnings squeeze next year as construction of the NBN nears completion. TLS confirmed they’ll pay shareholders an 8 cent dividend, comprising of a 5 cent final dividend and a 3 cent special dividend. This is down from 11 cents a year ago. TLS is down 5 cents or 1.2 per cent to $3.89.
Sydney Airport (SYD) has fallen 21 cents or 2.5 per cent to $8.16 after it announced their revenue in the six months through June rose more than 3 per cent, although overall passenger traffic declined slightly, driven by weakness in the domestic market.
Global oil prices fell by as much as 3.5 per cent on worries that slower global growth would lead to lower demand for oil. Woodside Petroleum (WPL) has fallen sharply this morning, down $1.96 or 5.8 per cent to $31.47 due to a 23 per cent decline in net profit to US$419 million in the first half of the year, in addition to the fall in the oil price overnight.
Invocare Ltd (IVC) is another stock to be sold off heavily this morning, after reporting a lower than anticipated half year result. IVC is down 98 cents or 6.4 per cent to $14.21. In more positive news, QBE Insurance (QBE) has announced a 29 per cent increase to their first half profit and they’re one of the only stocks not significantly impacted in today’s market fall. QBE has fallen only 21 cents or 1.7 per cent to $11.87.
The Aussie dollar is holding around 67.78 US cents. 1.8 billion shares have changed hands so far today worth $4.2 billion. 207 stocks are up, 941 down and 287 are unchanged.
Published by CommSec