Consumer confidence falls to April 2020 low: ASX extends fall, down 0.2% at noon

The Australian sharemarket has extended its fall for a fourth straight day with consumer staples and utilities advancing while the other sectors are in the red. Healthcare is the worst performer while the tech sector also remains weak.

At noon, the S&P/ASX 200 is 0.16 per cent or 11 points lower at 6,676. The SPI futures are pointing to a fall of 7 points.

As investors await the Federal Reserve monetary policy decision, resources and food-related stocks are catching a bid. Graincorp (ASX:GNC) is the best performer, up 4.6 per cent to $10.10 while the worst performer is Novonix (ASX:NVX), down 7 per cent to $2.66. Select Harvests (ASX:SHV), Beston Global Food (ASX:BFC), and Inghams (ASX:ING) are up in the range of 4 per cent each, riding on the coattails of Graincorp. Fortescue Metals (ASX:FMG) is up 2.2 per cent to $20.05, Lynas Rare Earths (ASX:LYC) has added 3.9 per cent to $8.86 and Alumina (ASX:AWC) is up 0.6 per cent to $1.57.

The Australian 10-year treasury yield has touched a fresh 8-year high of 4.11 per cent amid the results from the two consumer confidence surveys and news on the minimum wage to rise by a larger-than-expected 5.2 per cent from July in an effort to support low-paid workers.

ANZ and Roy Morgan’s consumer confidence fell 7.6 per cent last week after the RBA raised the cash rate by 50 basis points while Westpac-Melbourne Institute’s consumer sentiment fell for the seventh straight month by 4.5 per cent in June from the month before, its lowest point since April 2020 and 19.5 per cent from June last year amid a combination of surging prices and the prospect of faster interest rate hikes.

“This reading is even weaker than we had expected,” said Westpac’s chief economist, Bill Evans. “The survey detail shows a clear picture of a slump in sentiment being driven by rising inflation; an associated lift in interest rates; and a loss of confidence around the economic outlook, both here and abroad.”

Energy stocks are down 1.4 per cent on concerns over fuel demand and Beijing’s crackdown on venues linked to a Covid-19 outbreak, sparking concerns of fresh lockdowns. Woodside Energy (ASX:WDS) fell 1.6 per cent to $32.44 and Beach Energy (ASX:BPT) is trading 1.1 per cent lower to $1.74.

Meanwhile, HUB24 (ASX:HUB) reiterated that their financial year 2024 guidance for platform funds under administration will be in the range of $83 billion to $92 billion in their investor presentation. The wealth platform provider also cited that its fourth quarter financial year 2022 net flows are set to be in line with fourth quarter financial year 2021, excluding large transitions with a dividend payout ratio, targeting 40 per cent to 60 per cent of underlying net profit after tax. Shares are trading 2 per cent lower to $20.87.

Banks are mixed. Macquarie Group (ASX:MQG) is up 1.5 per cent to $165.79, Commonwealth Bank of Australia (ASX:CBA) has added 0.2 per cent to $91.38 while National Australia Bank (ASX:NAB), Westpac Banking Corporation (ASX:WBC), and ANZ Banking Group (ASX:ANZ) are trading lower.

There are a handful of stocks rallying, Incitec Pivot (ASX:IPL) is up 3.7 per cent to $3.53, Insurance Australia Group (ASX:IAG) has added 2.9 per cent to $4.29, and Elders (ASX:ELD) is trading 2.9 per cent to $12.82.

Company news

Rio Tinto (ASX:RIO) has delivered first ore from the Gudai-Darri iron ore mine in the Pilbara, Western Australia. Shares are trading 1 per cent higher at $112.15.

Aviation services provider Regional Express (ASX:REX) has unveiled a steep increase to its services in the major regional centres on its network. Shares are trading 2.8 per cent higher at $1.10.

Ampol (ASX:ALD) is raising $150 million of 60-year subordinated notes callable in six years paying a margin of 3.8 per cent over the bank bill swap rate. Shares are trading 1.1 per cent lower at $34.06.

Auckland Airport’s (ASX:AIA) total passengers rose 4.2 per cent during April, versus the prior year period, and was down 57.9 per cent compared to the pre-Covid equivalent in April 2019. Shares are trading 0.8 per cent higher at $6.63.

Wireless provider Swoop Holdings (ASX:SWP) has signed a $32.1 million deal with Westpac. Shares are trading 1.9 per cent lower at 52 cents.

Teaminvest Private Group (ASX:TIP) has acquired the retail fund manager Burman Invest. Shares are trading flat at 39 cents.

NeuroScientific Biopharmaceuticals (ASX:NSB) has announced positive preliminary results of its drug candidate EmtinB™ in a gold standard animal model of multiple sclerosis. Shares are trading 20 per cent higher at 21 cents.

Lithium Plus Minerals’ (ASX:LPM) mining management plan for its Bynoe Lithium project has been approved by the Northern Territory Department. Shares are trading 35.6 per cent higher at 40 cents.

Semiconductor developer BluGlass (ASX:BLG) has shipped its first laser prototypes to its initial customer in order to gain customer feedback. Shares are trading 7.7 per cent higher at $0.028.

ResMed (ASX:RMD) is set to acquire MEDIFOX DAN, a German out-of-hospital software solutions provider. Shares are trading 1.4 per cent lower at $29.33.

Commodities and the dollar

Gold is trading at US$1,816.37 an ounce.
Iron ore is 1.8 per cent lower at US$134.20 a ton.
Iron ore futures are pointing to a rise of 0.61 per cent.
One Australian dollar is buying 69.18 US cents.

Sources: Bloomberg, Factset