Home / Daily Market Update / ASX drops 0.6% as COVID, EOFY lead bourse lower

ASX drops 0.6% as COVID, EOFY lead bourse lower

Daily Market Update

Markets continue to fall, travel stocks hit as Sydney faces lockdown, Costa enters trading halt

The ASX 200 (ASX: XJO) finished 0.6% lower on Wednesday despite a strong overseas lead, with news of the extended Sydney travel restrictions impacting travel and consumer stocks.

Qantas Airways Limited (ASX: QAN) fell 0.3%, Flight Centre Travel Group Ltd (ASX: FLT) by 3.4%, and Corporate Travel Management Ltd (ASX: CTD) 1.7% as forced holiday cancellations hit the sector.

  • Sydney Airport Holdings Pty Ltd (ASX: SYD) was among the hardest hit, down 2.2% with management calling the announcement a ‘crushing blow’ and suggesting the tourism industry was in a ‘race for survival’.

    Only materials and IT finished higher, 0.9% and 1.1% respectively as the lithium sector continued its strong recent run.

    Costa Group Holdings Ltd (ASX: CGC) entered a trading halt as it announced the $200 million acquisition of 2PH Farms, a Queensland citrus grower.

    The deal will be funded using debt and a $190 million entitlement offer, with the company familiar with the group having distributed their product for in excess of 10 years.

    Costa confirmed first-half revenue guidance of $627 million and earnings of $124 million.

    Meanwhile, the Commonwealth Bank of Australia (ASX: CBA) has joined the rate hike party, now expecting a November 2022 increase to 0.25%, despite the likelihood of borders opening early in the new year.

    Woolworths doubles down on logistics, Dexus property valuations up, Catapult acquires

    Woolworths Group Ltd (ASX: WOW) flagged a $50 million impairment charge on its CBD store network as city sales remain impacted by COVID-19 lockdowns.

    On the positive side, it announced a further investment in its logistics network, and is set to build a 76,000 sqm facility in NSW to service over 280 stores replacing a fragmented system; shares fell 1.9%.

    Property manager Dexus Property Group (ASX: DXS) announced that 117 of its 128 properties had been revalued, resulting in an increase of 2.3% or $362 million; a stunning result given the market conditions.

    That said, the assets are predominantly high-quality offices (41), industrial properties (75), and healthcare (1) which have been barely impacted by lockdown measures.

    Professional sports GPS tracking software Catapult Group International Ltd (ASX: CAT) announced the acquisition of SBG Sports Software, which began as a joint venture with Mercedes F1.

    The group specialises in developing technology to capture and analyse large quantities of data and video.

    The deal will be funded by a US$35 million placement and US$5 million SPP, priced at a 13% discount to Catapult’s last closing price.  

    Nasdaq gains for third straight day, Tesla jumps, economic data at records

    The Nasdaq delivered a third straight day of record gains, finishing 0.1% higher on the back of a 5.3% rally in Telsa Inc (NASDAQ: TSLA) which is embarking on an ambitious rooftop solar program.

    The S&P 500 and Dow Jones were both weaker, down 0.1% and 0.2% with financials and retailers once again outperforming on signs of continued strength in the economy.

    The PMI readings, which are leading indicators for the economy, remain at strongly elevated levels with the manufacturing survey hitting 62.6 despite supply delays and the services PMI falling to 64.8.

    A PMI above 50 is seen as a strong expansion. European activity reached the fastest level since 2006, hitting 59.2.

    The company that produces these readings IHS Markit Ltd (NYSE: INFO) topped earnings estimates, reporting US$1.2 billion in revenue and US$372 million in cash flow; shares fell over 1%.

    The biggest news of the day was the collapse in the price of mortgage giants Fannie Mae (NYSE: FNMA) and Freddie Mac (NYSE: FMCC) which fell 32% and 35% respectively after the Supreme Court ruled dividends paid to the US Government following their bailout of the entities could not be recovered by investors.

    Industrials, property push ASX lower, RBA hikes again, Woolworths guides to higher sales

    The local market fell sharply on the back of an unexpected 0.25 per cent interest rate increase by the Reserve Bank of Australia. The news took the cash rate to 3.85 per cent, adding more pressure to household balance sheets and came despite most experts suggesting hikes had come to an end. The hardest hit…

    Drew Meredith | 3rd May 2023 | More
    ASX boosted by the energy sector, Origin upgrades outlook, Best & Less gets a bid

    The local sharemarket finished 0.4 per cent higher on Monday, buoyed by the energy and utilities sectors, which gained 1.3 and 1 per cent, despite the oil price continuing to fall. The sector was buoyed by an earnings upgrade from Origin Energy (ASX:ORG) which sent shares 0.5 per cent higher with AGL Energy (ASX:AGL) also…

    Drew Meredith | 2nd May 2023 | More
    Upbeat start to week – and month – likely for Aussie market

    After a strong session for global markets on Friday, Australian shares will take a positive lead into the new week – and month. The Australian benchmark index, the S&P/ASX 200, added 16.5 points, or 0.2 per cent, on Friday, to 7,309.2, but eased 53 points, or 0.7 per cent over the week. ASX futures trading…

    James Dunn | 1st May 2023 | More