Broad Selloff in Australia, ASX Down 1.9%

Marcus Jacob
29 Apr, 2015
New York City

In active trading, Australian market indexes dropped 1.9% in a broad selloff. Wesfarmers reported mixed quarterly sales performance across various chains. Sales at Bunnings, Officeworks and Kmart rose in double digits. Recall Holdings accepted a revised offer from Iron Mountain.

[R]5:30 PM Sydney – In active trading, Australian market indexes dropped 1.9% in a broad selloff. Wesfarmers reported mixed quarterly sales performance across various chains. Sales at Bunnings, Officeworks and Kmart rose in double digits. Recall Holdings accepted a revised offer from Iron Mountain.[/R]

Australian market indexes closed lower in a broad selloff and the latest earnings announcements failed to spark enthusiasm.

Australian dollar closed at 79.96 U.S. cents and in stock trading turnover gained to 772 million shares worth $6 billion.

At close, the ASX 200 Index declined 109.90 or 1.9% to 5,838.60 and the broader All Ordinaries Index slumped 103.30 to 5,818.20.

In commodities trading, gold jumped US$8 to US$1,209 an ounce and Brent crude fell 0.71 cents to close at US$64.12 a barrel.

Australian Stock Movers

Insurance Australia Group Ltd declined 4.1% to $5.65 after the general insurance company said claims relating in the aftermath of the recent heavy storms in parts of New South Wales may cost $300 million.

The insurer revised its insurance margin for the fiscal 2015 between 10.5% and 12.5%, lower than the earlier estimated range between 13.5% and 15.5%.

The total bill for natural disasters this year may rise to $1 billion.

National Australia Bank Ltd dropped 2.4% to $37.46 after the financial services provider plans to reduce its stake in the U.S.-based subsidiary Great Western Bancorp to 37.1% from 68.2% through the sale of 18 million shares in the U.S. lender.

The bank said it has not finalized the pricing and completion date of the sale offer.

Recall Holdings Ltd rose 0.3% to $7.64 after the data management company agreed to be acquired by the U.S.-based Iron Mountain for more than $2.7 billion in cash and stock.

In December, the company rejected the Iron Mountain offer of $7 per share.

Recall shareholders will receive 0.1722 share of an Iron Mountain for each share of or option to receive $8.50 in cash for each Recall share held.

Sims Metal Management Ltd plunged 6.8% to $10.77 despite the scrap metals recycler forecasted sales growth in the second-half and reaffirmed its commitment to “improving in gross margin and operating profit in-line with the prior year period.”

In a trading update the company warned that steel scrap volumes and prices have plummeted on the recent fall in iron ore price.

Wesfarmers Ltd fell 0.3% to $43 after the specialty department stores operator said total sales in the third-quarter ending in March from Coles chain rose 0.5% to $8.69 billion from $8.64 billion while comparable sales growth slowed down from the prior quarter.

Total home improvement and office supplies sales soared 11.5% to $2.82 billion from $2.53 billion in a year ago period.

Sales from Kmart climbed 10.9% to $937 million but sales from Target dropped 1.6% to $663 million from a year ago period.