RBA holds rates, Sealink Travel falls 6.3%: ASX closes 0.4% lower

The Australian sharemarket edged higher in the afternoon but remained in negative territory as technology followed Wall Street lower. At the closing bell, the S&P/ASX 200 was 0.4 per cent or 30.1 points lower at 7248.4.

Across the sectors, majority closed in the red, led by technology, down 2.9 per cent. Health, communication services, consumer discretionary and real estate all closed around 1 per cent lower, while energy added the most points, buoyed by the jump in the price of oil overnight, up 2.4 per cent. Utilities and consumer staples also closed in the black.

The best performing stock was Gold Road Resources (ASX:GOR), closing 7.2 per cent higher while the worst-performing stock was Sealink Travel Group (ASX:SLK), closing 6.3 per cent lower.

Tech stocks crumbled following Facebook’s outage, with the US stock declining 4.9 per cent over night. Appen (ASX:APX), a tech stock with Facebook as a customer, closed 4.7 per cent lower, while Afterpay (ASX:APT) closed 5.1 per cent lower. Major banks were in the red today, except Commonwealth (ASX:CBA) closing 0.06 per cent higher, while Westpac (ASX:WBC) led the fall, closing 1 per cent lower. Heavyweight miners were down, led by Fortescue (ASX:FMG) closing 1.5 per cent lower.

Travel stocks were mixed as restrictions remain in some states. NSW is preparing to ease restrcitions next week as they gear towards the 70 per cent vaccination mark. Flight Centre (ASX:FLT) closed 2 per cent higher, while Qantas (ASX:QAN) and Webjet (ASX:WEB) closed 1.2 and 0.9 per cent lower. 

Local economic news

ANZ and Roy Morgan released their weekly consumer confidence. Consumer Confidence was up for the fourth straight week, up by 0.9 points to 104.6 in early October. However, consumer confidence remains below the 2021 weekly average of 108.4 but is now 8.9 points higher than the same week a year ago, October 3/4, 2020 (95.7).

Consumer confidence this week was up in Sydney and Melbourne, as both cities quickly increase their vaccination rates, while down slightly in the other cities of Brisbane, Perth and Adelaide. Driving this week’s small increase was increasing confidence about the performance of the Australian economy over the next year and next five years.

AiGroup released the performance of construction index this morning. The Australian performance of construction index (PCI) improved by 14.9 points to 53.3 points in September this year. This indicates a recovery in activity across the construction sector after a sharp plunge in August due to Covid-19 lockdowns across NSW and other states. The Australian PCI has been especially volatile in 2020 and 2021, as the industry moves in and out of Covid-19 activity restrictions in various locations.

The Australian Bureau of Statistics released their International trade in goods and services for August. The seasonally adjusted balance on goods and services surplus increased $2,427 million to $15,077 million in August. Goods and services credits (exports) rose $1,923 million (4 per cent) to $48,524 million. Goods and services debits (imports) fell $506 million (1 per cent) to $33,446 million

The Reserve Bank board have kept cash rates on hold at 0.1 per cent (10 basis points) and the interest rate on Exchange Settlement balances at 0 per cent. Maintain the target of 10 basis points for the April 2024 Australian Government bond and continue to purchase government securities at the rate of $4 billion a week until at least mid February 2022.

The Delta outbreak has interrupted the recovery of the Australian economy and GDP is expected to have declined materially in the September quarter. The outbreak is affecting many parts of the economy, but the impact is uneven, with some areas facing very difficult conditions while others are continuing to grow strongly. This setback to the economic expansion in Australia is expected to be only temporary. As vaccination rates increase further and restrictions are eased, the economy is expected to bounce back.

Company news

Please join us for Stocks of the Hour here. 

Contact Energy (ASX:CEN) has inked two new 10-year deals to supply renewable electricity to forestry products manufacturer Pan Pac Forest Products and pulp and paper company Oji Fibre Solutions.

Evolution Mining (ASX:EVN) has entered into a binding agreement with Navarre Minerals (ASX:NML) to sell the Mt Carlton gold mine in Queensland for up to $90 million.

Infrastructure investment company Infratil (ASX:IFT) will buy a 40 per cent stake in the London data centre business Kao Data, in a $224-242 million (£120-130 million) deal.

Engineering company Worley (ASX:WOR) has been awarded a two-year extension from Woodside Petroleum (ASX:WPL) to continue their brownfield engineering services that support Woodside gas plants in Western Australia.

Futures

The Dow Jones futures are pointing to a rise of 15.00 points.
The S&P 500 futures are pointing to a rise of 5.00 points.
The Nasdaq futures are pointing to a rise of 39.50 points.
The SPI futures are pointing to a fall of 31 points when the market next opens.

Best and worst performers

The best-performing sector was Energy, up 2.4 per cent. The worst-performing sector was Information Technology, down 2.9 per cent.

The best-performing stock in the S&P/ASX 200 was Gold Road Resources (ASX:GOR), closing 7.2 per cent higher at $1.33. It was followed by shares in Redbubble (ASX:RBL) and Silver Lake Resources (ASX:SLR).

The worst-performing stock in the S&P/ASX 200 was Sealink Travel Group (ASX:SLK), closing 6.3 per cent lower at $7.78. It was followed by shares in Appen (ASX:APX) and Afterpay (ASX:APT).

Asian markets

Japan’s Nikkei has lost 2.28 per cent.
Hong Kong’s Hang Seng has gained 0.10 per cent.
China’s Shanghai Composite was closed.

Commodities and the dollar

Gold is trading at US$1760.39 an ounce.
Light crude is trading $0.16 higher at US$77.78 a barrel.
One Australian dollar is buying 72.65 US cents.