ASX falls; S&P upgrades Australia’s sovereign rating to ‘stable’ 

Summary

  • The S&P/ASX200 was trading 8.70 points or 0.12% lower at 7,286.70, after setting a new 100-day high.
  • Standard & Poor’s (S&P) has revised its long-term rating for Australia from ‘negative’ to ‘stable’.
  • Shares of Altium jumped 34% to AU$36.40 after the company rejected Autodesk’s takeover proposal.

Australian share market continued to trade lower by afternoon, bucking the global trend, as investors resorted to profit booking after the recent rally. Standard & Poor’s (S&P) has revised its long-term rating for Australia from ‘negative’ to ‘stable’, citing the Scott Morison government’s swift repose to the COVID-19 pandemic

The S&P/ASX200 was trading 8.70 points or 0.12% lower at 7,286.70, after setting a new 100-day high. The index opened flat this morning, undermining strong cues from US stocks, which closed higher with a strong lead at the end of the last week.

On the sectoral front, seven of 11 sectors were trading in green. Information Technology was the best performing sector with 2.3% gain. Some of the other sectors that were trading higher include Consumer Staples, Materials, Energy, A-REIT, Healthcare and Industrials.

                       

The Mid Market Pulse || ASX Falls; S&P Ups Australia Sovereign Rating To ‘Stable’

 

Bucking the trend, Financials was the worst performing sector with a 1.1% loss. Consumer Discretionary and Telecommunication Services were also among top laggards.  

The mining sector was leading the gains, following positive cues from the US Nasdaq index, with index heavyweights Afterpay (ASX:APT), Xero (ASX:XRO), Nuix (ASX:NXL), and Appen (ASX:APX) trading in green.

The mining stocks also witnessed buying, with iron ore miners Rio Tinto, BHP and Fortescue trading higher between 1-2%.

Top gainers and Losers 

Gambling and entertainment firm SkyCity Entertainment Group (ASX:SKC) was the top loser on the ASX today, falling 4.5% to AU$3.24. Some of the other worst performing stocks were Corporate Travel Management Ltd. (ASX:CTD), Star Entertainment Group Limited (ASX:SGR), Webjet Limited (ASX:WEB) and Flight Centre Travel Group Ltd (ASX:FLT).

Meanwhile, Altium (ASX: ALU) was the top percentage gainer on the ASX, rising 34% to AU$36.40. Nuix Limited (ASX:NXL), Centuria Industrial REIT (ASX:CIP), Austal Limited (ASX:ASB) and Appen Limited (ASX:APX) were among other top performers.

Shares in News

Shares of National Australia Bank (ASX: NAB) dropped nearly 3% to AU$26.69 after Australia's financial crime fighting agency launched a probe into suspected non-compliance with anti-money laundering laws. The Australian Transaction Reports and Analysis Centre (AUSTRAC) in a June 4 letter outlined "serious concerns" about NAB’s compliance with the Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) rules. In an exchange filing on Monday, NAB says AUSTRAC views that there is “potential serious and ongoing non-compliance” with customer identification procedures, ongoing customer due diligence and compliance with regard to anti-money laundering and counter-terrorism financing program.

In a similar development, AUSTRAC has begun enforcement investigations against casino operator Crown Resorts (ASX: CWN) and its rival SkyCity Entertainment Group (ASX:SKC) for breaching compliance norms. The agency has identified potential serious non-compliance with anti-money laundering and counter-terrorism financing rules by Crown Perth as well as SkyCity Adelaide. Weighed down by the development, the shares of Crown Resorts dropped 0.9% to AU$12.58, while SkyCity shares fell by 4.5% to AU$3.24.

Shares of Altium (ASX: ALU) in an exchange filing said that it had received a formal, non-binding, indicative and unsolicited proposal from Autodesk at $38.50 a share for the acquisition of the 100% stake via a scheme of arrangement. Altium, however, rejected the proposal, saying that the proposal significantly undervalued the company’s prospects.

Australasian Gold (ASX:A8G) on Monday informed exchange that it had signed a binding tenement sale and purchase agreement (SPA) to acquire a 100% interest in the Capella gold project. The acquisition of the Capella gold project will substantially increase its tenure within the Clermont goldfield, central Queensland. The company will issue 500,000 shares at 20 Australian cents per shares to Cape Coal Pty Ltd to complete the title transfer. It is subjected to 12 months’ escrow post-completion. Following the announcement, the share price of A8G rises 9% to 18 Australian cents.

Hansen Technologies (ASX:HSN) has announced receiving a conditional and non-binding proposal from BGH Capital Pty Ltd (BGH Capital) to acquire 100% of the outstanding shares of the company. The proposed arrangement reveals BGH offering a price of AU$6.50 cash per Hansen share. The proposal values Hansen at an enterprise value of AU$1.3 billion and represents a 33% premium to the AU$4.88 volume weighted average price (VWAP) for 6 months before 4 June 2021 and a 25% premium to the AU$5.18 closing price 4 June 2021. Meanwhile, HSN shares trade at AU$6.30, up 21.6%.

Estrella Resources Limited (ASX:ESR) (Estrella) announced a continuation of intersecting bands of massive nickel-copper-iron sulphides breccias, in its Phase 3 diamond drilling program, at the Carr Boyd Nickel-Copper Project. Boosted by the development, ESR shares climb 6.25% to 6.8 Australian cents.

Clinuvel Pharmaceuticals Ltd (ASX:CUV) has administered the drug ‘afamelanotide’ to the first patient diagnosed with an acute arterial ischaemic stroke (AIS) enrolled in the world’s first clinical trial (CUV801). In total, six adult AIS patients are to be evaluated in Phase II of the CUV801 study. Reacting to the news, Clinuvel shares fall 1.4% to AU$28.37.

Vonex Limited (ASX:VN8) has entered into a conditional, non-binding term sheet to purchase part of MNF Group Ltd’s (ASX:MNF) Direct Business. As per the proposed transaction, this would be transformational for Vonex delivering considerable scale with more than 5,250 new business customers, more than 100 new Australian telco channel partners, and almost doubling Vonex’s annualised recurring revenue on a full-year basis. The total proposed consideration is AU$31 million in cash payable in instalments, with AU$20 million owed on completion and intended to be funded predominantly via a debt facility and Vonex’s existing money. Following the announcement, the stock MNF traded 3.6% higher at AU$5.130 per share, while VN8 jumped 13.8% to 16.5 Australian cents.

Asian Markets Mixed

Asian shares trade mixed on Monday, undermining firm cues from Wall Street, which ended higher on Friday.  

Japan's Nikkei trades higher by 0.2%, Seoul's Kospi is up 0.01% and the Straits Times index in Singapore rises 0.15%.

In a similar trend, China’s Shanghai Composite rose 0.1%, while New Zealand's benchmark S&P/NZX 50 surges 0.5%. 

Bucking the trend, Hong Kong’s Hang Seng falls 0.5% and Taiwan’s Weighted Index also drops by 0.3%.

Crypto Markets Rebound

The cryptocurrency markets remained on recovery mode, with major crypto coins continuing to regain ground after the recent fall. The market witnessed a surge in buying after Central American nation El Salvador proposed to adopt Bitcoin as a legal tender. The country is planning to introduce legislation, informed President Nayib Bukele through a video message at the ongoing Bitcoin 2021 conference in Miami, which is being dubbed as one of the biggest Bitcoin events ever. 

Bitcoin (BTC), the largest cryptocurrency by market value, was trading around US$36,740, up 1.9% in the last 24 hours, as per CoinDesk 20 data. The price of Bitcoin has moved in a tight range of US$35,281 and US$36,819 in the past 24 hours.

Ether, the second-largest crypto, has risen 4.65% in the past 24 hours to trade at US$2,789.

The meme currency, Dogecoin, was trading flat with marginal gains at 37.4 US cents.

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