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August, 201712:24 AM

CommSec Daily Report Friday

CommSec Daily Report Friday

Geopolitical tensions relating to North Korea are finally impacting the Australian sharemarket...

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11.08.2017 01:12 PM

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Geopolitical tensions relating to North Korea are finally impacting the Australian sharemarket, with local shares posting their biggest falls in a fortnight. At lunch, the ASX 200 is down 1.2 per cent although thanks to gains on Monday and Wednesday, the index is down only ~0.5 per cent this week.

US markets provided a sluggish lead, with the Dow falling for the third day and recording its biggest tumble in three months. President Trump ramped up his rhetoric towards North Korea saying his threat yesterday to potentially bring ‘fire and fury’ down on the nation ‘wasn’t tough enough.

85 per cent of companies on the local market are losing ground today, with heavy losses from the banks and miners leading the losses. Defensive stocks in the telecommunication, utilities and gold sectors are the only improvers.

Gold stocks are standouts following a flight to safety which pushed the price of the precious metal higher overnight.

News Corp (NWS) is down 6 per cent after a hefty write-down of the value of its UK business led the media giant to a $429m quarterly loss. Revenue fell by 7 per cent to $2.08bn while advertising dollars slumped by 12 per cent.

REA – which is ~60 per cent owned by NWS – is down 4.5 per cent despite a 12 per cent lift in FY17 net profit to $228.3m. While revenue growth disappointed some analysts the owner of property search website has a solid FY18 outlook.

Baby Bunting (BBN) is down 13 per cent after its strong 17 per cent lift in sales and 47 per cent jump in profits fell short of expectations. The country’s biggest retailer of baby goods has recorded a 76 per cent gain in online transactions, with internet sales now accounting for 6.4 per cent of total sales.

Ardent Leisure (AAD) is down 0.75 per cent after recording a 44.6 per cent slide in EBITDA following the 45 day closure of Dreamworld and Whitewater World during the year.

Sigma Pharmaceuticals (SIG) is down 8 per cent after cutting its earnings forecasts for FY18 to ~$90m on sluggish sales and challenging conditions. This compares to market consensus of ~$95m.

National Bank (NAB) is following other banks into negative territory. Australia’s fourth largest bank by market capitalisation lifted cash profit 2 per cent to $1.7bn for the quarter thanks to lending growth and improved margins.

1.4bn shares have changed hands at lunch, worth a well above average $2.6bn. 307 stocks are up, 624 are down and 344 are unchanged. 

Originally published by CommSec
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