(Australian Associated Press)
Investors did not like what they read in BHP and CSL’s full-year reports and caused a third consecutive day of losses for shares.
BHP shares plunged more than seven per cent to $47.70 on Wednesday after the mining giant revealed plans to stop trading on the FTSE 100 in the UK. Those shares will move to the ASX.
Shaw and Partners chief investment officer Martin Crabb said the UK shares were trading at a discount to the Australian ones and investors responded.
“We have two classes of shares that have to come together,” he said.
“There is a gap in the price, and that gap has to become zero.”
Mr Crabb said BHP’s Australian shares may be under pressure for months until investors traded away the perceived difference.
The iron ore trader also raised profit and sold its oil and gas business to Woodside.
CSL also lifted profit but disappointed investors by forecasting lower profit this financial year.
The cost of collecting blood plasma to make medicines remains elevated.
Shares closed lower by 1.47 per cent to $293.56.
The heavyweights’ losses ensured the market followed Wall Street and closed lower.
Mr Crabb said a third day of losses followed concerns global economic growth may be slower than expected.
The coronavirus’ Delta strain is impeding progress.
The Reserve Bank of New Zealand was tipped to raise rates on Wednesday, but kept them on hold after the nation entered lockdown.
US retail sales fell more than expected in July, according to figures published overnight.
“People are saying this is going to take longer to heal,” Mr Crabb said of economic recovery from the pandemic.
“But the market is not positioned for that. The market is positioned for cyclical recovery.
“That is why we’re seeing people buy the retailers and supermarkets and long duration bonds, because they are defensive.”
The benchmark S&P/ASX200 index closed lower by 8.9 points, or 0.12 per cent, to 7502.1.
The All Ordinaries closed down 2.6 points, or 0.03 per cent, to 7770.7.
The coronavirus continued to rage in Australia after NSW reported a record daily infection count of 633. Three people died.
Millions of people across the nation remain in lockdown.
Coles gave an uncertain outlook as sales return to normal levels amid lengthy lockdowns in major cities.
The supermarket giant said trading had been mixed in the current quarter. Supermarket sales were up one per cent in the first seven weeks of the financial year.
Full-year profit rose 7.5 per cent to $1.01 billion.
Shares closed little changed at $18.34.
The recipient of BHP’s oil and gas business, Woodside, swung to a first-half profit.
Woodside posted a first-half profit of $US317 million ($A437 million) on the back of a rebound in oil and gas prices.
Shares closed down 2.12 per cent to $20.29.
BHP’s chief rivals did not have enjoyable days on the market either.
Fortescue lost 0.6 per cent to $21.45. Rio Tinto shed 2.3 per cent to $113.69.
Betting and lotteries operator Tabcorp said the demerger of its lotteries and Keno business would take place by June next year.
The group posted a full-year net profit after tax of $269 million after a loss the prior year.
Shareholders will receive a fully franked final dividend of seven cents per share. This is higher than the same payout last year.
Shares were down 0.82 per cent to $4.81.
The banks all improved. Westpac was best of the big four and higher by 1.41 per cent to $25.81.
The Australian dollar was buying 72.61 US cents at 1720 AEST, lower than 73.06 US cents at Tuesday’s close.
ON THE ASX
* The benchmark S&P/ASX200 index closed lower by 8.9 points, or 0.12 per cent, to 7502.1 on Wednesday.
* The All Ordinaries closed down 2.6 points, or 0.03 per cent, to 7770.7.
* At 1720 AEST, the SPI200 futures index was higher by one point, or 0.01 per cent, at 7428 points.
One Australian dollar buys:
* 72.61 US cents, from 73.06 cents on Tuesday
* 79.57 Japanese yen, from 79.52 yen
* 61.93 Euro cents, from 61.89 cents
* 52.82 British pence, from 52.79 pence
* 104.90 NZ cents, from 105.32 cents.