• S&P/ASX 200 SPI futures are pointing down, following a sharp sell-off in US markets.
  • Today’s Announcements: Insurance Australia Group (IAG) finalises reinsurance program | Nickel Mines (NIC) is granted tax relief from the Indonesian Ministry of Finance |

SPI futures indicate a negative start after the Nasdaq sees its biggest one day loss since February.

  • The SPI futures index is down 61 points or 0.8 per cent following a sell-off in the US markets overnight. ‘Hawkish’ minutes from the Fed meeting, focused on removing monetary stimulus, weighed on investor sentiment. The US sharemarket fell in response, with the US Dow Jones index down by 393 points or 1.1 per cent, retreating from record highs. The S&P 500 index slipped by 93 points or 1.9 per cent. And the Nasdaq index lost 523 points or 3.3 per cent, its biggest one-day loss since February.
  • In commodities markets, the Brent crude oil price gained US80 cents or 1 per cent to US$80.80 a barrel and the US Nymex crude price added US86 cents or 1.1 per cent to US$77.85 a barrel. Oil prices rose on Wednesday despite mixed news on US fuel inventories. The continued rally in oil prices may support the energy sector.
  • Bullion gained ground, with the gold futures price adding $10.50 or 0.6 per cent to $1,825.10 an ounce. But spot gold was trading lower near US$1,809 an ounce at the US close.
  • Iron ore added US$2.45 or 2 per cent to US$125.35 a tonne overnight. Share prices of London-listed iron ore miners continued to rally and followed the momentum of the underlying commodity, with RIO and BHP both adding around 2.0 per cent.

Insurance Australia Group (IAG) has finalised its reinsurance program for the 2022 calendar year.

  • IAG, more commonly known for underwriting NRMA Insurance’s policies, has announced that it has finalised its 2022 reinsurance catastrophe program. IAG has maintained its gross cover of up to $10 billion for a main catastrophe event, retaining the first $250 million for each loss (consistent with 2021). Drop-down covers of $50 million for subsequent catastrophes will reduce the cost of such events to $200 million. This comes at an elevated reinsurance cost, which is in-line with IAG’s internal planning processes.
  • Nickel Mines (NIC) has been granted tax concessions for its Indonesian operating entity, PT Angel Nickel. Angel Nickel, after satisfying regulatory requirements set by the Indonesian Ministry of Finance, has been granted a corporate income tax reduction of 100 per cent for 10 years, commencing when commercial production is achieved. Following the 10 year period, NIC will then have a corporate income tax reduction of 50 per cent of payable income tax for 2 years after.

Originally published by CommSec

Authors: Divik Nigam, Associate Equity Market Analyst and Craig James, Chief Economist.