ASX dives deep into red as US stimulus vote looms

CLOSING UPDATE

Investors have had their biggest loss in a week on the Australian share market and will be hoping US president-elect Joe Biden’s stimulus plan is passed after he takes office this week.

The S&P/ASX200 index closed lower 52.4 points, or 0.78 per cent, to 6663.0 on Monday.

The all ordinaries closed lower 51.4 points, or 0.74 per cent, at 6935.4.

The materials sector lost 1.93 per cent while financials fell 1.07 per cent.

US markets closed lower on Friday after disappointing retail data and investors being unimpressed with banks’ better than expected earnings.

The ASX and Aussie dollar did not benefit from strong Chinese gross domestic product data.

GDP expanded 6.5 per cent year-on-year in the fourth quarter, National Bureau of Statistics figures showed, quicker than the 6.1 per cent forecast by economists.

Burman Invest chief investment officer Julia Lee said Aussie dollar and ASX investors shrugged off those numbers.

“Generally it’s good news for the Aussie dollar and the Aussie share market,” she said.

“But we didn’t see that today.”

Chinese government stimulus and manufacturers stepped up production to supply goods to countries crippled by the pandemic and helped momentum.

Ms Lee expected investors would spend the week watching US earnings season and hoping US politicians approve the $US1.9 trillion stimulus proposal.

The incoming president is due to be sworn in on Wednesday.

Meanwhile, the head of Australia’s health department believes it unlikely international borders will substantially reopen this year, even if most people are vaccinated against coronavirus.

Brendan Murphy downplayed the prospect of widespread easing of border restrictions.

There were no local coronavirus infections reported in Australia.

On the ASX, Super Retail Group, which owns BCF, Macpac, Rebel and Supercheap Auto, had good news for investors.

The company said first-half net profit after tax was expected to rise by up to 201 per cent to $173 million, based on preliminary figures.

Shares closed higher 1.02 per cent to $11.63.

JB Hi-Fi, which includes whitegoods chain The Good Guys, said first-half preliminary figures indicated a 86.2 per cent rise in net profit after tax to $317.7 million.

Shares fetched a record $55.25, then eased to close higher 3.8 per cent to $52.70.

Premier Investments retail boss, Mark McInnes, has told the company he will leave.

Mr McInnes has given 12 months’ notice.

Last week the company, which owns Just Jeans, Portmans and Smiggle, said first- half earnings were expected to increase 85 per cent to $233 million.

Shares were lower by 2.3 per cent to $23.75.

In technology, Afterpay reached a record $140.40, then eased to be 0.86 per cent lower to $132.01.

Miners had sizeable falls. BHP lost 2.93 per cent to $45.45, while Fortescue shed 1.43 per cent to $24.82 and Rio Tinto dipped by 1.44 per cent to $118.79.

In banking, NAB suffered most of the big four and lost 2.03 per cent to $23.65. The results came after their US peers fell on Friday.

On Tuesday, US markets will be closed for the Martin Luther King Jr public holiday.

The weekly ANZ-Roy Morgan consumer confidence index is due. The index recorded two consecutive falls either side of the year-end festivities.

Rio Tinto will give an update for its December quarter, including the quantity of materials extracted from the earth.

The Aussie dollar was buying US76.86¢ at the close, lower from US77.61¢ at Friday’s close.

NOON UPDATE

Materials and energy were the two biggest burdens on the Australian share market, which was lower, following a weaker Wall Street.

The S&P/ASX200 benchmark index was lower by 31.2 points, or 0.46 per cent, to 6684.2 at 9am on Monday.

The all ordinaries was lower by 30.5 points, or 0.43 per cent, at 6956.3.

Materials was lower by 1.75 per cent, energy was down 1.13 per cent, while another major sector, financials, was down by 0.75 per cent.

The health sector increased 0.94 per cent.

The ASX is following a weak lead from US markets, which slipped after banks’ earnings reports disappointed investors and a decline in December retail sales data.

Much attention will be on US president-elect Joe Biden’s inauguration this week and first days in office.

The man who will replace Donald Trump last week unveiled a $US1.9 trillion stimulus proposal for the flagging US economy.

In Australia, the head of Australia’s health department believes it unlikely international borders will substantially reopen this year, even if most people are vaccinated against coronavirus.

Brendan Murphy downplayed the prospect of a widespread easing of border restrictions, meaning dreams of international travel will remain on hold.

There were no local coronavirus infections reported in Australia, although some state leaders want more people to come forward for testing.

On the ASX, two retail groups have reported bumper first-half earnings.

Super Retail Group, which owns BCF, Macpac, Rebel and Supercheap Auto, said net profit after tax was expected to rise up to 201 per cent to $173 million, based on preliminary figures.

The company on February 17 will give first-half earnings for the six months to December 26.

Shares were higher 1.1 per cent to $11.88.

JB Hi-Fi, which includes the whitegoods chain The Good Guys, said preliminary figures indicated an 86.2 per cent rise in net profit after tax to $317.7 million.

JB Hi-Fi on February 15 will give first-half earnings for the six months to December 31.

Shares reached a record $55.25, then eased to be higher 3.5 per cent to $52.55.

In technology, Afterpay reached a record $140.40, then eased to be lower by 0.35 per cent to $132.68.

IT services provider Data3 said first-half pre-tax profit was expected to be up to 9 per cent higher than the same period the previous year.

Data3 said the profit estimate was $13.7 million.

Shares were higher by 5.89 per cent to $5.57.

In mining, BHP lost 2.86 per cent to $45.48, Fortescue shed 0.79 per cent to $24.98 while Rio Tinto lost 2.12 per cent to $117.96.

In banking, ANZ and NAB had the biggest losses of the big four. They shed more than 1.2 per cent each.

The Aussie dollar was buying US76.93¢ at 9am, higher from US77.61¢ at Friday’s close.

AAP