Markets at a glance 3 September
Around the grounds
The Australian share market is in the red on this Tuesday session as miners and consumer staples stocks drag, with investors striking a cautious tone ahead of local GDP data tomorrow that could drive the country’s monetary policy forward.
Breaking down the details, the mining sub-index is down around half a per cent to touch its lowest level since August 21 as weak metal prices weigh. Dalian iron ore futures alongside aluminium prices have dropped, dented by a batch of dismal economic data from top consumer China. The AXMM index is down over 18% year to date, as of last close.
Consumer staples are also dragging the bourse lower as a number of heavyweights trade ex-dividend. Woolworths (ASX: WOW) shares are the biggest losers down nearly 4%, a day after the retailer confirmed it would exit its Endeavour Group stake three years after its spin off, while Coles (ASX: COL) and Wesfarmers (ASX: WES) are down nearly 2.5% each.
More broadly, energy and healthcare are also lower in relatively thin trade.
To the broader economy, Australia’s current account deficit has hit a six-year high in the second quarter as commodity prices slipped and more money flowed abroad in debt payments. The latest data from the ABS shows the current account ran a deficit of AU$10.7 billion in the period, well above forecasts of a near AU$6 billion shortfall.
Investors focus now shifts to tomorrow’s GDP read. NAB expects growth will be +0.1% in the second quarter, representing another quarter of weak growth. Year ended growth is expected to come in at 0.8% year on year which, outside of the 2020 COVID lockdowns, would be the weakest annual growth since the early 1990s.
In the news
To the corporate calendar and shares of TPG Telecom (ASX: TPG) are tracking higher, reversing earlier losses as analysts at Macquarie say the telecom operator’s cost discipline is positive, partially offsetting concerns around top-line trends.
The broker lifts the price target to AU$5.40 from AU$5.20 a share, with a ‘neutral’ rating retained. The stock is down just shy of 4% this year, as of last close.
Sticking in the broker space, shares of Australia’s Austal (ASX: ASB) have slipped as Macquarie trims its price target on the stock to AU$2.50 from AU$2.55 a share, citing lower net cash and earnings estimates. ‘Neutral’ rating retained, and the stock is up nearly 12% this year, as of last close.
Finally, to the smaller end of town, Australian listed shares of Biome Australia (ASX: BIO) have surged to touch their highest level since mid-July after the company forecast first quarter revenue in fiscal 2025 of more than AU$4 million, up from the previous quarter’s record AU$3.8 billion.
The stock is up nearly 220% year to date, including today’s session’s move.
Elsewhere, Noxopharm (ASX: NOX) shares have jumped as much as 33% as the biotech says preclinical testing for its brain cancer drug candidates shows a significant reduction in tumour growth. The stock is up over 83% YTD, including today’s session moves.
And shares of Strike Energy (ASX: STX) are also higher, touching a one-month high after the natural gas explorer discovered two high quality, low impurity conventional gas in the Perth Basin. The stock is down over 59% this year as of last close.
Going global
Rounding things out on the global stage, Tokyo’s Nikkei 225 is higher on the tails of a weaker yen and long-term domestic bond yields rise providing an additional boost to banks and insurers. MSCI’s broadest index of Asia-Pacific shares outside Japan have ticked lower, with US futures pointing to start to the Wall Street session when trade gets underway.
Finally, to the currency trade, the Australian unit remains buoyant against the yen, shrugging off falls in iron ore prices and local data that signalled softness in economic growth. The kiwi has eased, to touch its lowest level in a week, while the euro continues to hover near a two-week low.
The big dollar though is stead, as traders brace for a deluge of labour data in the US, including Friday’s non-farm payrolls report which will influence the size of an expected interest rate cut from the Federal Reserve later this month.
Markets are pricing in a 69% chance of a 25-basis point cut, with a 31% probability of a 50bsps cut, according to the latest CME FedWatch Tool.
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