Australian shares open steady as coronavirus pandemic hurts company earnings

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The Australian share market has been little changed in early trade as profit reporting season draws to a close and investors worry about the economic impact of the coronavirus.

Despite the pandemic, CommSec said three quarters of companies still reported statutory profits for the year to June, although this is the weakest outcome for at least 10 years, as the coronavirus pandemic eats into earnings.

Nearly 70 per cent of firms issued a dividend, but dividend payments fell by 36 per cent.

At 10:25am (AEST), the ASX 200 index had come off its early lows and was steady at 6,073 points.

Energy stocks led the gains on the benchmark index, with most sectors higher.

Brent crude oil rose 0.3 per cent to $US45.94 a barrel.

Lithium miner Orocobre led the early falls on the ASX 200 index, trading down 9.7 per cent to $2.62.

Construction firm Boral jumped 4.3 per cent to $4.10.

The Australian dollar was trading around 73.66 US cents, after reaching 73.81 US cents earlier this morning.

Spot gold has increased 0.4 per cent to $US1,972.94 an ounce.

IOOF to buy NAB wealth arm

Financial firm IOOF extended its trading halt as it seeks to raise $1 billion to buy National Australia Bank’s superannuation and wealth division, MLC Group, for $1.4 billion.

The move comes as the big banks offload their investment businesses in the wake of financial scandals.

IOOF said statutory net profit for the year jumped more than 400 per cent to $147 million, but underlying net profit fell by a third to $129 million.

National Australia Bank shares rose 0.7 per cent to $18.05.

Wall Street rises

On Wall Street on Friday, technology stocks drove the S&P 500 index to another record closing high, its sixth since confirming a bull market on August 18.

The S&P 500 rose 24 points, or 0.7 per cent, to 3,508 points.

Oil stocks gained after Hurricane Laura passed through the Gulf of Mexico without widespread damage and as oil rigs and refineries restarted operations.

The Nasdaq also reached a record closing high, up 0.6 per cent to 11,696.

The Dow Jones Industrial Average also rose 0.6 per cent to 28,654.

United Airlines and Coca-Cola rose more than 3 per cent as they prepared to cut costs, including standing down staff.

Stocks were also boosted after a top aide to President Donald Trump said the US leader was willing to sign a $US1.3 trillion coronavirus relief bill.

Economic data showed that US consumers increased their spending more than expected in July, but they also continued to save more amid the coronavirus uncertainty.

By business reporter Sue Lannin and wires (Original ABC Article)

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