Economic activity fell 7% in June quarter: ASX tracking 1.6% higher
The Australian share market is now tracking 1.6 per cent higher. Shares in IOOF Holdings (ASX:IFL) dropped. They announced this morning that they had completed the institutional component of their capital raising to partly held fund the acquisition of NAB’s MLC. All sectors are in the green.
The S&P/ASX 200 index
The S&P/ASX 200 index is 93 points up at 6,046. On the futures market the SPI is suggesting a rise of 100 points.
Local economic news
Australian Gross Domestic Product (GDP) fell 7 per cent in the June quarter, the largest quarterly fall on record, according to figures released by the Australian Bureau of Statistics (ABS) today. This follows a fall of 0.3 per cent in the March quarter 2020.
Broker moves
Citi rates Zip Co (ASX:Z1P) as a Downgrade to a Sell from a Neutral. Citi envisages potential for the share price to outperform in the near term. Still, the stock is up 35 per cent over the last month and the entry of PayPal into the BNPL segment increases concerns regarding growth expectations for the medium term. While the core Australian business is differentiated, Citi remains concerned that Zip is a late entry in the US, given Afterpay (ASX:APT), Klarna and Affirm's sizeable lead. Shares in Zip co (ASX:Z1P) trading 10.1 per cent lower at $7.17.
Company news
Western Areas (ASX:WSA) is pleased to announce the maiden Ore Reserve for its AM6 deposit, located at the Cosmos Nickel Operation boosts Odysseus base case. A 26 per cent increase in AM6 Mineral Resource Estimate of 2.8Mt. The AM6 deposit is directly accessible from the existing AM5 decline infrastructure and provides an additional feed source to the Cosmos mill. The pre-production capital estimate for AM6 is $30 million and total sustaining life of mine capital of $81 million. Shares in Western Areas (ASX:WSA) are 5.5 per cent higher at $2.30.
Best and worst performers
The best-performing sector is materials rising 2.3 per cent, while the worst performing sector is energy gaining the least at 0.5 per cent.
The best performing stock in the S&P/ASX 200 is Bluescope Steel (ASX:BSL) rising 6.8 per cent to $13.29, followed by shares in AMP (ASX:AMP) and United Malt Group (ASX:UMG).
The worst performing stock in the S&P/ASX 200 is IOOF Holdings (ASX:IFL) dropping 13.9 per cent to $3.67, followed by shares in Flightcentre Travel Group (ASX:FLT) and Beach Energy (ASX:BPT).
Commodities and the dollar
Gold is trading at US$1,964 an ounce.
Iron ore price is 0.2 per cent higher at US$124.66.
Iron ore futures are suggesting a rise of 0.4 per cent.
One Australian dollar is buying 73.50US cents.
Copyright 2020 – Finance News Network
Source: Finance News Network
