ASX rally goes into reverse – $AUD slides to US$0.7000 – Westpac and AUSTRAC agree to $1.3bn penalty

September 24, 2020 - 1 month ago
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The Australian share market reversed from Wednesday’s bullish price action and finished lower for the fifth time in the last six sessions.

The benchmark S&P/ASX 200 index dropped -48 points, or -0.81%, to 5,875.9 points on Thursday, while the broader All Ordinaries index finished -54.8 points, or -0.9% lower, to 6,056.5.

All sectors ended lower, with Afterpay plummeting -5.83% to $74.14 after it said chief financial officer Luke Bortoli is set to leave after three years in the job as the buy now pay later provider shakes up its senior management ranks.

Mr Bortoli will be succeeded by Rebecca Lowde, who has been chief executive of Salmat for three years and was CFO before that. She starts on October 6.

Meanwhile, the gold miners also headed south after spot gold plummeted nearly -3% to an intraday low of $1,848, with Newcrest falling -3.7% to $30.69, Northern Star lost -3% to $13.20, and Evolution fell -5.3% to $5.53.

Wall Street racked up more losses on Wednesday as all three major U.S. stock indexes closed lower, adding to September’s struggles after sliding in the final hour of trade, wiping out the market’s gains from the day before.

Wall Street fall setup the Australian share market roller-coaster ride after the Dow Jones fell -1.92%, the S&P 500 dropped -2.37%, and the rich-tech Nasdaq Composite lost -3.2%.

Shares of Tesla fell -10.3% after Elon Musk offered new delivery predictions for 2020 and detailed a new battery design that he claims will make Tesla’s cars cheaper to produce.

The stock was also under pressure after Tesla sued the U.S. government to overturn tariffs on China.

The U.S. market has been whiplashed by several shifts in momentum recently, as investors fretted over uncertainty around the coronavirus pandemic and further stimulus.

U.S. Federal Reserve Chairman Jerome Powell told a congressional panel Wednesday that further fiscal stimulus is still needed for the U.S. economic recovery to continue.

Meanwhile, the Australian Transaction Reports and Analysis Centre (AUSTRAC) announced this Thursday that it has come to an agreement with Westpac to implement a $1.3 billion proposed penalty over the Australian bank’s breaches of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act).

The Financial sector finished mixed with National Australia Bank leading the “Fab Four” (banks) higher after rising +0.41% to $17.19, while Australia and New Zealand Banking Group added +0.12% to $16.87, meanwhile, Westpac Banking Corp slid -0.12% to $16.37, the Commonwealth Bank lost -0.11% to $64.20, and Macquarie Group slipped -0.41% to $121.73.

Mining heavyweights also weighed on the index with titans BHP falling -0.65% to $36.91, Rio Tinto lost -0.32% to $97.19, and Fortescue Metals Group Ltd tumbled -0.19% to $15.95.

Among the other blue-chip firms, Biotechnology giant CSL dropped -0.25% to $296.48, Wesfarmers slipped -0.15% to $45.61, Woolworths tumbled -0.97% to $37.88.

Qantas slipped -1.78% to $3.87 after news sources reported the airline’s workers are owed thousands of dollars in back pay after a court held the airline had been misusing JobKeeper in way that has meant it is pocketing parts of the wage subsidy.

Investment conglomerate Washington H Soul Pattinson climbed +0.85% to $23.68. It lifted its final dividend +2.9% to 35¢ per share to take full-year dividends to 60¢, up +3.4% on the financial year 2019.

Adjusted net profit fell -44.7% to $169.8 million, but net cash flows from investments climbed +49% which provided for the dividend increase.

The Australian dollar fell to its lowest level in more than two months, slipping -0.75% to an intraday low of US$0.7048.

The Australian dollar is currently buying US$0.7040 (as of writing).

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