20 June Markets at a glance
Around the grounds
- ASX trades flat to negative
- Guzman Y Gomez dazzles on its ASX debut
- Energy & financials slip
- Iron ore price edges higher but stuck in tight range
- BoE on tap
The S&P/ASX200 is trading range bound with marginal losses in mining and financial stocks as risks of sticky inflation dampen hopes for early interest rates cuts from the Reserve Bank of Australia (RBA).
In commodities, iron ore futures are modestly higher but remains tuck in a tight range as traders weighed production resumption by some steelmakers in top consumer China against high inventories and the potential for output cuts.
Energy stocks have also edged slightly lower, tracking weakness in oil prices over geo-political tensions in the Middle East.
Across the ditch New Zealand’s economy grew faster than expected in the first quarter though remained soft. Annual GDP rose 0.3% versus the 0.2% the market was expecting and in line with the NZ central bank’s forecast.
In the news
The IPO market is in focus today with shares of Australian Mexican restaurant chain Guzman Y Gomez (GYG) surging 36% in their first day of trading in what is Australia’s biggest IPO so far this year.
GYG put up AU$335.1 million of new stock for trading, with the share price rise taking the company’s market capitalisation to around AU$3 billion, up from the AU$2.2 billion before its debut.
Australian listed shares of Dexus (DXS) expects the book value of its portfolio to drop by 9% for the six months to June. The real estate firm says valuations of 170 of 176 assets resulted in a total estimated decrease of around AU$1.3 billion for the period.
Namoi Cotton (NAM) cotton shares are among the day’s worst performers, dropping around 7% to touch a seven-week low after the ACCC raised competition concerns over Singapore's Olam Agri’s AU$144.9 million takeover for the company.
The competition watchdog says the proposed acquisition will reduce the number of competing ginning suppliers in New South Wales which could result in higher prices for cotton growers in the region.
And Australian listed shares of Treasury Wine Estates (TWE) are also under pressure as the company forecasts FY24 EBIT for its Penfolds segment lower than market estimates.
Going global
Stocks around the region are steady, hovering near two-year highs as traders await more clues on the path of the policy in the U.S. Tokyo’s Nikkie 225 is bucking the broader trend, with the bourse under pressure, taking its cues from Europe after Wall Street was closed for a public holiday.
In currency markets sterling is steady ahead of the Bank of England (BoE) rate decision tonight, while the US dollar edged higher.
The BoE is widely expected to keep rates on hold, with investor focus on any guidance on how soon the easing cycle will begin. It comes after data showed last night UK inflation returned to the central bank’s 2% target for the first time in nearly three years in May though underlying price pressures remain.
Locally, the Australian dollar continues to edge higher sitting around 66.7 US cents.
FX markets remain in a tight trading range as investors await the next catalyst from central bank policy settings around the globe.
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