Live: ASX 200 falls 1.2pc before US rate call; Qantas rules out app cyber breach; Amcor up on results beat

Rabobank sees two RBA rate hikes in 2024. Qantas rules out app cyber breach. Amcor up on results beat. Endeavour falls after Woolworths selldown. Inquiry head criticises Star's slow reform.

Investors continue to await the US Fed’s latest rates call — heavily tipped to hold at current levels.

Welcome to the Trading Day blog for Wednesday, May 1. The ASX 200 closed 1.2 per cent lower at 7569.90 points, following a sharp fall on Wall Street ahead of the Federal Reserve rate decision.

The Aussie dollar is trading around US64.77c.

Updates

5:09 pm May 1, 2024

Austal rallies on minister's bid comments

Bridget Carter

Austal’s shares closed more than 3 per cent higher on Wednesday on comments from Defence Minister Richard Marles that the government would not block South Korea’s Hanwha buying the country’s naval ship builder.

“In respect of Austal, ultimately this is a matter for Austal. They are a private company,” Mr Marles said. “From the government’s perspective, we don’t have any concern about Hanwha moving in this direction.”

Hanwha's $1bn buyout proposal was rejected by the $800m-plus company’s board on expectations that a deal would not gain regulatory clearance.

More in DataRoom.

4:38 pm May 1, 2024

ASX 200 ends down 1.2pc pre-FOMC

David Rogers

Australia's share market remains weak before the FOMC meeting concludes at 0400am AEST Thursday after tracking a selloff in the US market as interest rate jitters intensified after higher than expected US labour cost data.

The ASX 200 index ends down 1.2 per cent at 7569.9 with all sectors in the red after hitting a two-day low of 7556.6 in early trading.

Underperforming sectors include energy, materials, tech, consumer discretionary and property. BHP falls 1.7 per cent, Woodside drops 2.6 per cent on weaker oil prices, Fortescue loses 2.8 per cent and WiseTech dives 4.3 per cent.

Banks limit the selloff with NAB flat before it reports on Thursday as Macquarie says a fall in bank earnings is now priced in.

Amcor jumps 4.6 per cent on better than expected earnings and guidance.

Coles gains 1.1 per cent on broker upgrades.

Ampol falls 3.5 per cent and IGO slips 1.4 per cent on broker downgrades.

Rabobank ups the ante predicting two more RBA rate hikes.

4:37 pm May 1, 2024

Adgemis' Empire Hotel off the market

David Ross

Jon Adgemis' Empire Hotel in Annandale has come off the market, just weeks after lenders pushed the pub baron to list the asset.

Savills confirmed the pub had come off the market, after the Empire Hotel was listed two weeks ago amid a dispute between Mr Adgemis and lenders.

Mr Adgemis snapped up the pub in late 2021, in a $20m deal, with valuers tipping the hotel could be worth as much as $40m today.

4:19 pm May 1, 2024 Highlight

RBA to hike twice in 2024: Rabobank

David Rogers

Rabobank now sees a terminal RBA cash rate of 4.85 per cent versus the current level of 4.35 per cent as it predicts rate hikes in August and November.

"It is highly likely that inflation will remain higher than the RBA’s February p projections for June, and the unemployment rate will remain lower," warns Rabobank senior macro strategist Benjamin Picton.

The offshore experience is sending "troubling signals that inflation is resurgent", raising risks that the RBA’s cautious approach has left it behind the pace on monetary tightening. Meanwhile the Australian economy is gathering steam, and asset markets suggest financial conditions are too accommodative.

Mr Picton also scraps future cash rate cuts from his forecast in accordance with Rabobank's house view that Donald Trump will win the US election and enact structurally inflationary universal tariffs.

4:01 pm May 1, 2024 Highlight

Magnis to roll loan to end May

David Ross

Magnis Energy Technologies has told shareholders it has reached an in-principle agreement with its lenders to roll a $4.6m loan that fell due on April 30 to a new maturity on May 31.

This marks the fourth time Magnis has extended the financial lifeline, after revealing on Tuesday it had just $28,000 in the bank.

Magnis told the market it would provide the full details of the loan once documentation has been finalised and signed by all parties.

This comes after Magnis revealed on Tuesday the interest rate on the loan had soared from 5 per cent, to 5.5 per cent, at some point in the last quarter.

3:00 pm May 1, 2024 Highlight

Energy leads falls as oil prices drop

Megan Neil

The energy sector is leading the sell-off on the ASX 200, as oil prices fall further in Asian trading.

Crude oil fell to its lowest level in a month overnight as tensions in the Middle East continue to ease, ANZ strategists note.

"The potential for a ceasefire agreement between Israel and Hamas has eased concerns of an escalation of the conflict and any possible disruptions to supply," an ANZ research note says.

"US Secretary of State Antony Blinken, who is currently in the Middle East, continues to urge leaders of the Hamas militant group to quickly reach a decision on Israeli conditions for a ceasefire.

"Continued signs of inflation also raised concerns about demand for crude oil. This comes ahead of the US driving season, where demand for gasoline rises strongly."

US West Texas Intermediate crude oil fell below $US82 a barrel in the US session, with rising US crude production also a factor alongside hopes for a Middle East ceasefire. Brent crude fell about 0.6 per cent.

In Asian trading, Brent crude is down 0.8 per cent to $US85.65 a barrel while WTI futures are down 0.9 per cent to $US81.19.

On the ASX 200, the energy sector is down about 1.8 per cent as Woodside falls 2.3 per cent to $27.57 and Santos drops 2.1 per cent to $7.53.

2:20 pm May 1, 2024 Highlight

Analyst upgrades boost Coles shares

Megan Neil

Analyst upgrades are boosting Coles shares, which are up 1.7 per cent to $16.49 in a weaker overall market.

CLSA has raised Coles to an accumulate rating, while UBS lifted its recommendation on the retailer to buy from neutral. The upgrades follow Coles Group's third quarter sales on Tuesday that showed total sales lifted 3.4 per cent to $10.03bn, driven by a strong 5.1 per cent gain in sales at its supermarkets arm to $9.07bn although liquor sales fell 1.9 per cent to $786m.

UBS analyst Shaun Cousins says the outlook for Coles in improving, with the upgrade to a buy rating due to supermarket sales growth and EBIT margin recovery,

"The strength of Coles total sales growth to start calendar year 2024 was a surprise yet there are broader and more enduring drivers that support CY24 sales growth ahead of Woolworths," he said.

Mr Cousins says a regulatory overhang has weighed on the Coles and Woolworths share prices so far in the 2024 financial year. "Yet the outlook for Coles is improving, with Coles sales growth forecast to exceed Woolworths in CY24 and EBIT margins to recover/expand."

1:08 pm May 1, 2024

ACCC OKs Virgin-Air NZ codeshare

Megan Neil

The competition regulator plans to give the green light to Virgin Australia selling and marketing Air New Zealand's trans-Tasman flights.

The Australian Competition and Consumer Commission has issued a draft determination proposing to grant authorisation to Virgin and Air New Zealand for the proposed unilateral code sharing arrangements on trans-Tasman routes.

Virgin Australia wants to put its airline code on trans-Tasman routes operated by Air New Zealand that are sold in Australia and originate in Australia, with the NZ carrier to specify the fares.

“This proposed code sharing arrangement has the potential to increase ticketing choices for Australians travelling to New Zealand, and provide Velocity frequent flyer program benefits and international lounge access for eligible Virgin Australia customers,” ACCC deputy chair Mick Keogh said.

The proposal does not apply to routes where Virgin operates its own services, as it currently does between Queenstown and Melbourne, Sydney and Brisbane.

The ACCC said it notes concerns that the code sharing arrangements may result in increased demand for Air New Zealand trans-Tasman services and upward pressure on airfares. “We consider it unlikely that any significant increase in passenger demand for trans-Tasman services due to this code sharing arrangement would raise airfares,’ Mr Keogh said.

“On current information, we also consider that the code sharing arrangements do not materially reduce Virgin Australia's incentive to operate its own services on other trans-Tasman routes.”

1:06 pm May 1, 2024

ASX 200 down 1.1pc after US tumble

David Rogers

Australia's share market recovers slightly from a weak open as investors await the outcome of the FOMC meeting at 0400am AEST Thursday.

The local market remains on track for a sharp fall after Wall Street dived as hopes of rate cuts were pushed out by higher than expected labour cost data.

The S&P/ASX 200 is down 1.1 per cent at 7580 in early afternoon trading after falling as much as 1.4 per cent to a near two-week low of 7556.5.

While it has crept back above a layer of chart support around 7570, the index looks set for a decent break of its 100-day moving average at 7602.

The tech, energy, discretionary, materials, property and industrials sectors are leading broad-based falls but the big banks are outperforming before they report in coming days.

12:58 pm May 1, 2024

Endeavour's hotels boss has died

Megan Neil

Endeavour Group's hotels managing director Mario Volpe has died following a long illness, the liquor and pubs giant says.

Mr Volpe started working with Australian Leisure and Hospitality (ALH) in the 1980s and was appointed managing director of the hotels business in 2022.

"He was a true custodian of our pubs, bringing to life their unique history and stories, and a kind and authentic leader," Endeavour said in an ASX statement.

"The imprint Mario left on this business, our people and the industry is enduring. He will be fondly remembered and missed by us all."

Endeavour said Paul Walton will continue as acting managing director of the hotels division.