ASX 200 ends little changed as retailers, miners fall; banks up as CBA hits record high; iron ore prices ease

Consumer stocks down as big names Coles, Woolworths and Wesfarmers trade ex-dividend. More pain for iron ore prices weighs on mining heavyweights. Public demand tipped to drive second quarter GDP growth.

World markets retreated overnight after news Chinese manufacturing contracted for a fourth consecutive month. The Australian sharemarket is set for a flat start to trading. Picture: Noel Celis/AFP

Welcome to the Trading Day blog for Tuesday, September 3. The ASX 200 closed little changed, down just 6.7 points to 8103.2 points. 

The Aussie dollar is trading around US67.32c.

Updates

4:41 pm September 3, 2024

ASX 200 ends little changed, CBA's record day

Megan Neil

The ASX 200 has closed little changed, as strength in the major banks including another record day for CBA offset weakness in iron ore heavyweights and ex-dividend retailers.

The ASX 200 closed only 6.7 points lower at 8103.2 points, after missing a positive lead from Wall Street markets that were closed for a public holiday.

The consumer staples sector had the biggest fall of almost 2 per cent as major retailers Coles and Woolworths traded ex-dividend. Coles fell 2.4 per cent to $18.50 and Woolworths lost 2.8 per cent to $34.83.

The consumer discretionary sector was also weaker, with heavyweight Wesfarmers down 1.4 per cent to $71.39 as it also went ex-dividend.

Iron ore futures were down a further 2.4 per cent to $US94.50 per tonne in Singapore trading, pressuring the mining heavyweights. BHP dropped 1.7 per cent to $39.63, Fortescue fell 2.6 per cent to $17.70, Rio Tinto fell 1.7 per cent to $108.12 and Mineral Resources tumbled 8.5 per cent to $36.17.

The heavyweight financial sector and tech stocks helped support the bourse, as CBA closed at an all-time high of $143.38, up 1.1 per cent.

The other major banks were also stronger with ANZ gaining 1 per cent to $30.95 while NAB and Westpac both rose 0.7 per cent to $38.92 and $31.81, respectively. Macquarie lifted 1.3 per cent to $219.81.

3:24 pm September 3, 2024

Consumers trade down to lower priced products: SunRice

Megan Neil

Consumers are trading down to lower priced products as cost-of-living pressures bite, Australia's biggest rice producer says.

SunRice chief executive Paul Serra said consumers cut discretionary spending and traded down to lower price offerings in some categories during the 2024 financial year, a trend that was expected to continue.

"Following a strong year of growth in FY24, the SunRice Group will seek to repeat the exceptional performance at both the top and bottom line in FY25," Mr Serra told the company's annual general meeting on Tuesday.

"Against this backdrop, the group is prepared to navigate through challenges, including a softening in sales prices in some markets, increasing pressure from lower price offerings, unfavourable foreign exchange on imports, ongoing disruption to the global shipping industry, and cost pressures in global non-medium grain rice supply, energy and labour.

"The group continues to focus on branded product sales, however, implementing effective pricing strategies will be challenging in FY25; particularly in markets where consumers are facing increasing cost-of-living pressures, which impact
discretionary spending and are driving more trading down to lower priced products."

SunRice posted a $68.2m net profit in the year to April 30, up 24 per cent on the previous year, with record group revenue of $1.88bn.

2:33 pm September 3, 2024 Highlight

CBA and NAB upgrade quarterly GDP forecasts

Megan Neil

CBA and NAB economists have upgraded their forecasts for second quarter GDP growth on the back of the strength in public demand.

CBA now expects Wednesday's June quarter GDP to show 0.4 per cent growth, up from its previous estimate of 0.2 per cent, while NAB has revised up its forecast to 0.3 per cent quarter-on-quarter, from its previous forecast of 0.1 per cent, after stronger-than-expected public demand data released on Tuesday. GDP rose 0.1 per cent in the March quarter.

"The upward revision to our forecast is due to surprising strength in public demand, set to add 0.4 percentage points to growth," NAB senior economists Taylor Nugent and Brody Viney said. "The final result will depend on household consumption where we expect to see another subdued quarterly outcome."

CBA senior economist Belinda Allen and economist Stephen Wu said public demand's 0.4 percentage point contribution to growth was double what they had pencilled in.

CBA and NAB economists expect GDP growth to come in at 1.1 per cent year-on-year, which would be unchanged on the result for the year to the March quarter. "That implies that since the beginning of 2024, all the growth in the economy has come from the public sector," Ms Allen and Mr Wu said.

ANZ economists have revised their June quarter GDP growth forecast down marginally to 0.1 per cent quarter-on-quarter, from 0.2 per cent previously, and kept their forecast for annual growth unchanged at 0.8 per cent.

"Relative to our initial forecasts, the partials today and yesterday have had offsetting effects, with private inventories and public demand stronger-than-expected, and wages, profits and net exports weaker than expected," ANZ senior economist Catherine Birch and head of Australian economics Adam Boyton said.

"If the data print in line with our forecast, Q2 GDP growth will be a touch weaker than the RBA’s forecast of 0.9 per cent year-on-year in the most recent Statement on Monetary Policy. But given GDP is lagged, and we have seen employment growth and monthly inflation exceed expectations since the RBA’s August meeting, this is unlikely to shift the RBA’s thinking," Ms Birch and Mr Boyton said.

"The household consumption data published in the national accounts tomorrow will be in focus to gauge the extent of the weakness in the household sector. But it will need to be considered in the context of the stage 3 tax cuts and cost-of-living relief measures, which began in July and will materially boost household disposable income in Q3."

Westpac economists still expect the economy to have grown 0.3 per cent in the June quarter. "However, the underlying drivers differed, with growth in public demand much stronger than expected, offset by a downside surprise in goods exports, while exports of services (mainly foreign students) continues to grow strongly," the Westpac team said.

Westpac's Pat Bustamante, Jameson Coombs, Ryan Wells and Matthew Hassan said growth of 0.3 per cent in the June quarter would see annual growth ease to 1.0 per cent – "the softest growth momentum since the early 1990s recession".

1:07 pm September 3, 2024 Highlight

Chalmers RBA comments 'pathetic': Wilson boss

Cliona O'Dowd

Wilson Asset Management chairman Geoff Wilson has blasted Jim Chalmers for making "pathetic and exceptionally disappointing" comments about the ­Reserve Bank’s efforts to tame inflation.

Speaking to The Australian, Mr Wilson said the Treasurer's move to declare the RBA was "smashing the economy" with higher rates was "appalling behaviour", with the central bank’s job made harder by the federal government’s stimulatory budgets.

"It’s exceptionally disappointing and pathetic, and totally uncalled for. It's just really unbecoming behaviour by Albanese and Chalmers. Appalling behavior by what are meant to be our political leaders. They should be supporting the Reserve Bank," Mr Wilson said.

"If they weren't running expansionary budgets, then (the RBA) wouldn't have that problem. They've lined the RBA up (and said) you try to keep inflation under control, and we're going to run budgets that are stimulatory. So we're not going to help you at all, we're not going to work with you, instead we're going to work against you, and then we're going to blame you for the problem and make you the scapegoat."

Read the full story here.

1:03 pm September 3, 2024

Coles launching liquor rebrand trial

Eli Greenblat

Supermarket giant Coles will launch a rebranding trial for a handful of its Liquorland, Vintage Cellars and First Choice retail outlets which could be a stepping stone to an eventual nationwide rebranding of its struggling liquor arm.

The supermarket chain has announced a pilot which will see select Vintage Cellars and First Choice Liquor Market stores adopt the Liquorland brand, to take place in all stores across South Australia and in a small number of stores in Victoria and Queensland.

Selected Vintage Cellars will be converted to Liquorland Cellars and participating First Choice Liquor Market stores to be rebranded as Liquorland Warehouse.

The pilot program signals the next phase of the Liquorland transformation, which over the past four years has seen more than 600 stores converted to the new Black & White model which includes a more spacious store layout, clearer in-store signage and a more locally relevant range, Coles said.

Coles Liquor chief executive Michael Courtney said the pilot will allow the retailer to provide a more compelling customer offer by bringing the best elements of Liquorland, First Choice Liquor Market and Vintage Cellars under its largest and most recognised brand.

The liquor arm of Coles has underperformed for some years and in the most recent reporting season was beaten by rivals Dan Murphy’s and BWS, owned by Endeavour Group, in terms of sales growth and profitability.

12:11 pm September 3, 2024

ASX 200 down slightly as miners, retailers fall

Megan Neil

The ASX 200 remains marginally in the red at noon, with mining heavyweights weaker and big-name retailers trading ex-dividend.

With Wall Street closed overnight for a public holiday and global bourses hit by weak Chinese economic data on Monday, the ASX 200 opened lower but was down by only eight points or 0.1 per cent to 8101.9 points by noon AEST.

The consumer staples sector is down sharply as major retailers Coles, which is 2.1 per cent lower at $18.55, and Woolworths, which is 3.1 per cent weaker at $34.72, trade ex-dividend.

The consumer discretionary sector is also weaker, with heavyweight Wesfarmers down 1.3 per cent to $71.46 as it also trades ex-dividend.

A further fall in iron ore futures is weighing on the mining majors, with BHP down 0.5 per cent to $40.15, Rio Tinto falling 0.2 per cent to $109.75 and Fortescue dropping 0.7 per cent to $18.06.

The major banks are mostly higher. CBA is up 0.4 per cent to $142.29 after hitting a fresh record intraday high of $142.68, Westpac gains 0.1 per cent to $31.63, and ANZ lifts 0.2 per cent to $30.73. NAB is flat at $38.66.

11:49 am September 3, 2024 Highlight

Current account deficit falls to $10.7bn in June quarter

Staff writers

Australia’s current accounts balance has fallen by $4.4bn to a deficit of $10.7bn in the June quarter 2024, in another worrying sign for the strength of the economy.

According to figures for the June quarter released by the Australian Bureau of Statistics on Tuesday, the balance on goods and services fell $3.9bn to $12bn.

Exports of goods fell 4.4 per cent, with lower prices for iron ore and coal driving the decrease.

“This quarter’s current account deficit was the largest since June quarter 2018, reflecting continued falls in bulk commodity prices and higher income paid to non-residents,” Tom Lay, ABS head of international statistics.

“Iron ore and coal prices saw a second quarterly fall, which is reflected in goods export prices 5.4 per cent lower compared to this time last year.”

The quarterly figures summarise Australia’s economic transactions with the rest of the world, and are the last set of numbers which will be calculated into Wednesday’s GDP update.

Read the full story here.

– NewsWire

10:44 am September 3, 2024

Batteries lead transition development, small increase in wind

Colin Packham

New data shows large-scale batteries are being developed faster than large-scale solar, though there has been acceleration in the development of new capacity to replace coal.

The Clean Energy Council said just shy of 600MW of new batteries were committed in the last quarter, while three wind and solar projects were financially committed during that period.

Some 577MW of onshore wind secured financial pledges, the CEC said, with the generation type securing no commitments at all during 2023.

10:33 am September 3, 2024

ASX dips; consumer stocks lead falls

Joseph Carbone

The ASX 200 opens 0.2 per cent lower to 8093 points Tuesday, led by falls in consumer stocks.

The consumer staples sector is down 1.6 per cent. Woolworths has dropped 3.5 per cent to $34.57 per share as it trades ex-dividend. Endeavour is 1 per cent lower to $5.21 and Coles is also down 1.8 per cent to $18.62, with both also trading ex-dividend.

The consumer discretionary sector is 0.9 per cent. Heavyweight Wesfarmers is 2.1 per cent lower to $70.92 per share as it trades ex-dividend, while Harvey Norman is 2.2 per cent higher to $4.70.

Tech stocks are faring best on a sector-by-sector basis, with WiseTech 1.1 per cent higher to $122.74 and Xero up 0.5 per cent to $144.35.

REA Group is 0.7 per cent higher to $208.84, after falling on Monday after announcing it may bid for London-listed company Rightmove.

On the big four banks, Commonwealth is 0.2 per cent higher to $142.06, NAB is 0.1 per cent lower to $38.63, Westpac is flat at $31.59 and ANZ is 0.1 higher to $30.69.

In mining following further drops in iron ore prices, BHP is down 0.6 per cent to $40.10 per share, Rio Tinto is 0.5 per cent lower to $109.37, Fortescue is 0.3 per cent down to $18.12 and Pilbara Minerals has dipped 0.9 per cent to $2.82 per share.

9:01 am September 3, 2024

Scyne finds inaugural CEO

David Ross

Government consulting firm Scyne Advisory has poached senior Google executive John Ball to take on the top job after months of hunting.

Scyne chair John Mullen said Mr Ball’s hiring fulfilled a key promise made by the firm to the Department of Finance to secure an "independent CEO".

Scyne acting CEO Richard Gwilym will now focus on the advisory business as managing partner.

Mr Ball joins Scyne after almost 20 years with Microsoft as well as nearly a decade at tech giant Google, heading up the firm’s customer solutions business in Australia and New Zealand.

It comes after Scyne was spun out of audit and consulting firm PwC Australia in the wake of a damaging tax scandal, after the professional services giant was revealed to have misused confidential government information.