ASX lower for week after grim outlook

Australia's share market has had a negative week, finishing lower by 0.25 per cent after a flurry of coronavirus-hit earnings reports.

The S&P/ASX200 benchmark index closed down by 8.8 points, or 0.14 per cent, at 6111.2 on Friday.

While it has been trending higher in recent months, the index remains well below its peak of 7197.2 on February 20.

The All Ordinaries index finished lower by 1.0 points, or 0.02 per cent, at 6270.7.

Bell Direct market analyst Jessica Amir said market sentiment was "pretty rattled" by the virus's hit to full-year results this week.

"Investors are coming to grips with how dire the reporting season is," she said.

"Overwhelmingly, companies are guiding to a weaker FY21. There is no hiding that COVID has made things quite ugly.

"So I guess investors are battening down the hatches on what they're investing in."

They would not be the only ones to have a grim outlook.

Reserve Bank governor Philip Lowe told a meeting of the national cabinet that the cash rate, which is at 0.25 per cent, could remain at that level for "at least three years if not more".

Prime Minister Scott Morrison said Dr Lowe had also told the meeting that financial markets were performing well.

Retail sales data released on Friday showed a rise of 3.3 per cent in July, lifting 12.2 per cent over the year despite the Victorian coronavirus lockdowns.

The Australian Bureau of Statistics' early figures showed the largest chunk of the sales were furniture and whitegoods.

There was more hope on the virus front after Victoria recorded 179 new cases in the past 24 hours. There were nine deaths.

It was the first day in five-and-a-half weeks that numbers dipped under 200.

NSW recorded one new case.

On the market, investors sent Suncorp shares higher by 11.05 per cent to $9.65 and were not alarmed by its 32 per cent fall in full-year cash earnings.

Suncorp said its $749 million earnings were mostly affected by reduced profits in its insurance division from higher reinsurance costs and a low-yield environment, and COVID-19 impacts on its banking and wealth division.

Suncorp will pay a final dividend of 10 cents per share, fully franked. This is lower from the 2019 final dividend of 44 cents.

Inghams is concerned Australians are eating less chicken due to COVID-19 restrictions after the crisis felled full-year profit by 68 per cent.

Inghams made a net profit after tax of $40.1 million in the 12 months to June 27.

Shareholders will receive a final dividend of 6.7 cents per share, fully franked.

This is lower than the 2019 equivalent of 10.5 cents per share, fully franked.

The result was good enough for investors. Inghams shares finished higher by 3.04 per cent to $3.39.

Westpac shares finished lower by 0.17 per cent to $17.23 after it revealed it would sell its Vendor Finance business, which helps third parties fund equipment finance loans to businesses.

Angle Finance, which is owned by Cerberus Capital Management, will buy the operation.

The bank expects the sale to have a negligible result on its balance sheet.

Its major peers fell. ANZ lost 0.43 per cent to $18.38, Commonwealth Bank shed 0.9 per cent to $69.63 and NAB edged lower by 0.28 per cent to $17.65.

The big miners were mixed. BHP lost 0.93 per cent to $38.36, Rio Tinto shed 0.53 per cent to $100.71 and Fortescue rose by 0.73 per cent to $17.99.

There were share price highs for companies including Appen ($40.93), Breville ($28.85), Carsales ($20.95), Dominos ($86.82), JB Hi-Fi ($51.83), REA Group ($121.0) and Wesfarmers ($49.51).

Companies to report next week include Afterpay and Fortescue Metals Group.

Friday's stagnant ASX performance came after Wall Street closed higher despite data that reinforced the US Federal Reserve's view of a difficult road to economic recovery.

Jobless claims in the US rose back above the one million mark last week after slipping below that level for the first time since the start of the pandemic.

The Australian dollar was buying 71.89 US cents at 1715 AEST, up from 71.71 US cents at Thursday's close.

ON THE ASX

* The S&P/ASX200 benchmark index closed lower by 8.8 points, or 0.14 per cent, at 6111.2 on Friday.

* The All Ordinaries index finished lower by 1.0 points, or 0.02 per cent, at 6270.7.

* At 1715 AEST, the SPI200 futures index was trading lower by 3.0 points, or 0.05 per cent, at 6,065 points.

CURRENCY SNAPSHOT

One Australian dollar buys:

* 71.89 US cents, from 71.81 US cents on Thursday

* 75.82 Japanese yen, from 76.09 yen

* 60.64 Euro cents, from 60.54 cents

* 54.35 British pence, from 54.88 pence

* 110.08 NZ cents, from 109.47 cents.

Austrlaian Associated PressBack to Breaking News

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