ASX extends losses, DigiCo IPO stumbles
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The news: The Australian sharemarket extended losses as the materials sector tumbled on a fall in gold prices and a lack of detail on China’s stimulus plans.
The benchmark ASX 200 fell 0.41% to end at 8,296, with nine out of 11 sectors finishing in red.
Biggest movers:
- HMC Capital (-7.24%), DigiCo Infrastructure REIT (-9%) — DigiCo floated on the ASX in the biggest IPO since Viva Energy in 2018. HMC Capital was the worst ASX 200 performer.
- Gold miners — Made up five of the ASX 200’s worst performers after spot gold fell on Thursday as traders looked to lock in profits ahead of the US Federal Reserve’s interest rate meeting next week. Bellevue Gold (-4.75%), Regis Resources (-4.18%), and Ramelius Resources (-4.17%) tumbled.
- Iress (8.19%) — Reaffirmed its full-year earnings guidance following recent divestments.
- Ventia Services Group (10.81%) — Reversed early losses as Macquarie analysts described the market’s reaction to price fixing allegations by the competition regulator as “overdone”. It was the best ASX 200 performer.
Other news:
- Vulcan Energy (-12.35%) — Completed a discounted capital raise and provisionally secured $819 million worth of debt financing from the European Investment Bank.
- Steadfast Group (-0.52%) — Two employees are being investigated by the corporate regulator over trading of the company’s shares.
- GPT Group (ended flat) — Announced it will acquire a 50% interest in two of Perron Group's shopping centres for about $482 million.
- ANZ (0.03%) — Morgan Stanley analysts are forecasting institutional banking revenue to drop at ANZ amid lower margins and markets income.
- Insignia Financial (6.18%) — Has received a $2.7 billion takeover bid from private equity giant Bain Capital.
Mining news:
- Iron ore miners — China’s key policy meeting on Thursday left investors to guess stimulus specifics, leading to a tumble in iron ore futures and mining stocks. Morgans also downgraded Fortescue (-3.66%) from ‘add’ to ‘hold’. BHP (-1.48%) and Rio Tinto (-2.76%) also fell.
- South32 (-1.16%) — The Western Australian minister for environment agreed to amend environmental approval conditions that saw $827 million written off the value of the project earlier this year.
- Resolute Mining (-1.15%) — Flagged it will pay higher corporate income tax and fuel duty as part of a migration to a new mining code in Mali.
- Iluka Resources (ended flat) — Announced that Robert Cole has retired as chair and non-executive director due to ill health.
- Uranium miners — Majors Paladin Energy (4.74%), Deep Yellow (2.81%) and Boss Energy (3.98%) rallied after independent modelling claimed that the Coalition’s nuclear energy plans would be $263 billion cheaper than Labor’s renewables strategy.
The Australian dollar is buying 63.64 US cents.
What’s ahead: Next week will see a handful of company's hold annual general meetings, including Orica, NAB, ANZ, Elders and Incitec Pivot.
All eyes will be on the US Federal Reserve on Thursday as it makes its last interest rate decision for the year. It is widely expected to cut rates by 25 basis points.
