ASX tumbles as unemployment reaches 7.1%: Aus shares down 1.6% at noon

The Australian share market has been sliding since the open following mostly negative leads from Wall Street. The much-anticipated labour force data revealed that the national unemployed rate climbed to 7.1 per cent in May. All of the sectors except Consumer Staples have seen a sell off this morning.

The S&P/ASX 200 index is 97 points down or 1.6 per cent lower at 5,895. On the futures market the SPI is 104 points lower.

Local economic news

Data released by the Australian Bureau of Statistics today shows that Australia's population is growing, largely as a result of overseas migration. The population grew by 1.4 per cent during the last calendar year. Natural increase accounted for around 40 per cent of annual population growth, while overseas migration accounted for the remaining 60 per cent.

ABS data released today revealed that the national unemployment rate has risen from 6.4 per cent in April to 7.1 per cent in May. Over 227,000 people lost their job between April and May and monthly hours worked fell 0.7 per cent during the month. Around 2.3 million Australians (1 in 5) have been affected by job losses and hour reductions during the covid pandemic, with further job losses expected in September when the government’s job keeper stimulus is scheduled to end.

Broker moves

Citi has downgraded Ansell (ASX:ANN) from a buy to a neutral, with a 12 month price target of $35.00. Ansell’s CEO Magnus Nicolin has delayed his retirement until December 2021 as covid travel restrictions have hampered the company’s efforts to recruit his replacement. The company’s 2020 financial year guidance remains unchanged as the company expands its manufacturing and distribution capacity and attempts to pivot its focus away from pandemic-hit industries. Shares in Ansell (ASX:ANN) are trading 0.1 per cent lower at $35.62.

Company news

Payment solution provider, Splitit Payments (ASX:SPT) has signed a multi-year agreement with Mastercard (NYSE:MA). Splitit will leverage Mastercard’s network of partners to extend and scale instalment functionality to consumers and merchants. It will integrate its instalment solution with Mastercard’s suite of technology as a network partner . The company says this will “enable merchants to deliver seamless and secure consumer experiences at [the] checkout, both in store and online”. The partnership will test the waters by launching test pilot across 3 markets, with a view to rolling it out globally. Mastercard says the “partnership with Splitit will help to drive higher transaction volumes for businesses and deliver budgeting solutions in the moment consumers are seeking them”. Shares in Splitit Payments (ASX:SPT) are trading 43.94 per cent higher at 95 cents at noon.

Best and worst performers

The best-performing sector is Consumer Staples, adding 0.1 per cent, while the worst performing sector is Consumer Discretionary, shedding 2.1 per cent.

The best performing stock in the S&P/ASX 200 is Parenti Global (ASX:PRN), rising 4.3 per cent to $1.46, followed by shares in A2 Milk Company (ASX:A2M) and Pilbara Minerals (ASX:PLS).

The worst performing stock in the S&P/ASX 200 is Vocus (ASX:VOC), dropping 5.9 per cent to $3.01, followed by shares in Virgin Money UK (ASX:VUK) and Webjet (ASX:WEB).

Asian markets

Japan’s Nikkei has lost 1.2 per cent, Hong Kong’s Hang Seng has shed 0.9 per cent and the Shanghai Composite has lost 0.3 per cent.

Commodities and the dollar

Gold is trading at US$1,725 an ounce.
Iron ore price is steady at $104.90.
Iron ore futures are pointing to a rise of 0.1 per cent.
One Australian dollar is buying 68.49 US cents.

Source: Finance News Network