- Australian shares extended their losing streak to the sixth day on Friday (17 June)
- With all the ASX sectors trading in the red, consumer staples was the best performing one
- Consumer discretionary companies are taking measure to lessen the impact of inflation
Australian shares traded sharply lower on Friday (17 June), extending their losses to the sixth straight day as recessionary fears mount. All the 11 sectors of ASX were in the red today with consumer staples being the least affected. The consumer staples sector, which is defensive in nature, was lower by 0.65%, extending its 4.19% decline for the last five days. The representative index ASX 200 Consumer Staples (XSJ) was down 0.806% by noon.
Given this backdrop, discussed here is the performances of Woolworths Group Ltd (ASX:WOW), Coles Group Limited (ASX:COL), GrainCorp Limited (ASX:GNC) and A2 Milk Company Limited (ASX:A2M).
Note- prices mentioned in the story are as of 17 June 2022, 12 PM AEST on the ASX.
Woolworths Group Ltd (ASX:WOW)
The grocery retailer’s share price was down by 0.61% today. WOW shares seem to be impacted by the broader market weakness led by inflationary concerns. Investors were worried that rising inflation and expected hikes in RBA cash rate may inflate costs for business. Often businesses pass on cost hikes to consumers in form of higher prices. However, as per media reports Woolies has recently prompted a price freeze on its and branded products and essentials like flour, sugar, chicken tenders and others. The price freeze will reportedly continue till the end of the year to help customers tackle increased cost of living.
Coles Group Limited (ASX:COL)
Supermarket operator Coles Group Limited has reportedly announced a few steps to tackle rising cost of living. Coles is reportedly offering customers a 10% off on total transaction price for AU$100 to 250 gift cards. These cards are issued without an added purchase fee and there is no limit on the number of cards customers can buy. Also, earlier this month, Coles had said that it would keep price of many essential items below AU$1.
Meanwhile on ASX, COL share price has lost over 1% by mid-day, to trade at AU$16.64 a share. Lacking any major announcements, the retailer’s shares seem to be following the sectoral trend.
Snapshot of share price performances on Friday
Image Source © 2022 Kalkine Media ®
GrainCorp Limited (ASX:GNC).
Agricultural product focused GrainCorp Limited also could not survive the selloff led by inflationary worries. GNC share price was more than 3% lower compared to its previous closing price. In the last thirty days, GNC shares have lost about 7.87%.
Globally the demand for food grains is high due to the supply disruption caused by Russia-Ukraine war. GrainCorp claims to have worked on its supply chain resilience and global network strengthening. Meanwhile, Indian wheat export ban might also work in favour of the Australian producer. However inflationary pressure on costs is what appears to be worrying investors.
A2 Milk Company Limited (ASX:A2M)
Another noteworthy stock from Consumer staples category is A2 Milk Company Limited. While the consumer sector is lower today, A2M share price has jumped up over 3% by noon. While there was no announcement by the company justifying today’s price movement, A2M share price seems to be following its peer Bubs’, which has benefitted from baby food shortage in the US market.