ASX limits losses after better GDP growth: Wednesday 1 September

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Steven Deare
(Australian Associated Press)

 

Investors have recovered most of their early losses after Australia’s economy staved off another coronavirus recession, but some wondered for how long.

Investors sold the ASX 200 lower by 0.6 per cent in the first 90 minutes of trading on Wednesday before Asian markets opened.

At the same time, traders learned the national economy grew by a better-than-expected 0.7 per cent during the June quarter.

A negative result would have all but guaranteed a recession from the September quarter result, given the impact of lockdowns in the ACT, NSW and Victoria.

There were increases in household and public sector spending as well as private investment during the June quarter.

However, HSBC Australia chief economist Paul Bloxham warned the recovery was history and economic growth would stall throughout the rest of 2021.

While some government stimulus measures had been reintroduced, others such as HomeBuilder had not, he said.

Mr Bloxham also noted Victorian leaders had joined NSW peers in no longer pursuing zero community infections.

“The economy now needs to adjust to living with the virus,” Mr Bloxham said.

“We expect the next recovery to be more gradual than the last one.”

The benchmark S&P/ASX200 index closed lower by 7.8 points, or 0.1 per cent, to 7527.1.

The All Ordinaries closed down 10.4 points, or 0.13 per cent, to 7812.9.

Energy shares proved best prior to the Organisation of the Petroleum Exporting Countries and allies, known as OPEC+, meeting soon.

There had been marginal losses on Wall Street after data showed US consumer confidence fell sharply in August.

The coronavirus Delta variant is blunting US economic progress and supply chain problems persist.

On the Aussie market, consumer shares fared worst.

Woolworths boss Brad Banducci sold $5.8 million worth of shares after receiving more in his latest pay deal.

Mr Banducci sold 140,000 shares for $41.45 each after being given 174,586 as part of his pay.

He still owns 365,729 shares.

Shares in the company closed down 1.56 per cent to $41.10.

Bunnings owner Wesfarmers traded ex-dividend and fell 3.3 per cent to $57.97.

The big miners had notable losses. BHP declined by 1.27 per cent to $45.03. Fortescue shed 3.19 per cent to $20.33. Rio Tinto lost 2.38 per cent to $109.39.

The big four banks were higher. NAB was best and rose 2.2 per cent to $28.34.

Trading stocks in retail operator Mosaic Brands was paused prior to a share sale.

The company behind Katies, Noni B and Rockmans on Tuesday flagged a capital raising to improve its balance sheet amid the pandemic.

Shares last traded lower by 3.19 per cent to 46 cents.

IGA supermarkets operator Metcash said trading for the first 16 weeks of its financial year was better than pre-COVID levels.

Virus-related costs had increased but were not material.

Shares were down 2.45 per cent to $3.98.

The Australian dollar was buying 73.40 US cents at 1729 AEST, higher than 73.38 US cents at Tuesday’s close.

ON THE ASX

* The benchmark S&P/ASX200 index closed lower by 7.8 points, or 0.1 per cent, to 7527.1 on Wednesday.

* The All Ordinaries closed down 10.4 points, or 0.13 per cent, to 7812.9.

* At 1729 AEST, the SPI200 futures index was up by one point, or 0.01 per cent, to 7472 points.

CURRENCY SNAPSHOT

One Australian dollar buys:

* 73.40 US cents, from 73.38 cents on Tuesday

* 80.93 Japanese yen, from 80.53 yen

* 62.19 Euro cents, from 62.02 cents

* 53.35 British pence, from 53.19 pence

* 103.96 NZ cents, from 103.86 cents.

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