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ASX down 0.7% at noon: UBS analysts forecast upside for health insurers

According to UBS analysts, Suncorp (ASX:SUN), Hub24 (ASX:HUB), GQG Partners, and Magellan (ASX:MFG) are potential sources of upside in the upcoming reporting season. They believe that Medibank (ASX:MPL) and NIB (ASX:NHF) are likely to perform well, benefiting from low claims, solid participation, and strong non-resident trends. The insurance subsector in the Australian Financial Services is favoured by UBS due to its attractive combination of repricing, yield support, and reasonable valuations.

However, UBS warns that disappointment is expected from AMP (ASX:AMP), Insurance Australia Group (ASX:IAG), and Perpetual (ASX:PPT) during the reporting season.

At noon, the S&P/ASX 200 is 0.7 per cent lower at 7,398.

The SPI futures are pointing to a fall of 49 points.

Best and worst performers

The best-performing sector is Information Technology, up 0.5 per cent. The worst-performing sector is Utilities, down 1.85 per cent.

The best-performing large cap is Pro Medicus (ASX:PME), trading 2.62 per cent higher at $70.83. It is followed by shares in Yancoal Australia (ASX:YAL) and NEXTDC (ASX:NXT).

The worst-performing large cap is AGL Energy (ASX:AGL), trading 4.44 per cent lower at $11.735. It is followed by shares in Northern Star Resources (ASX:NST) and ALS (ASX:ALQ).

Asian markets

Asia-Pacific markets fell Wednesday after ratings agency Fitch cut the U.S. credit rating from AAA to AA+, citing “expected fiscal deterioration over the next three years.”

IG market analyst Tony Sycamore said this will spark risk aversion flows, which means lower equities in Asia, as well as safe haven buying of treasuries and currencies such as the Japanese yen and Swiss franc against riskier currencies, such as the Australian and New Zealand dollars.

Japan’s Nikkei 225 led losses in the region and slid 1.21%, while the Topix is also down 0.53%.

South Korea’s Kospi fell 0.64% and the Kosdaq also dipped 0.72%. The country saw its inflation rate for July come in at 2.3% — its lowest level in 25 months.

Hong Kong’s Hang Seng index shed 0.9% on its open, while mainland Chinese markets were trading close to the flatline. The Shanghai Composite slid marginally, and the Shenzhen Component was up marginally.

Company news

Tamboran Resources (ASX:TBN) has signed four separate non-binding Letters of Intent with Origin, AGL, EnergyAustralia and Shell Energy Australia to potentially purchase gas from Tamboran’s low-reservoir Beetaloo Basin gas assets for a period of up to 10 – 15 years. In response, Managing Director and CEO, Joel Riddle, said: “The initial interest from key East Coast gas buyers for the long-term purchase of Tamboran’s low-reservoir CO2 Beetaloo Basin gas volumes demonstrates gas’ viability and role in the energy transition in Australia.” Shares are trading flat at 15 cents.

Tamboran Resources (ASX:SYA; OTCQB:SYAXF) announced the first commercial shipment of spodumene concentrate from the North American Lithium operation in Québec, Canada. In response, Sayona’s Managing Director, Brett Lynch commented: “We are particularly pleased to make this first shipment in less than two years since NAL’s acquisition in August 2021, reflecting the team’s strong execution capabilities and commitment.” Shares are trading 1.61 per cent higher at 16 cents.

BCAL Diagnostics (ASX: BDX) has received breakthrough results from their Precion US study. The Precion result enables blood samples to be analysed in many commercial laboratories worldwide fast tracking market access and penetration. In response, Jayne Shaw, Executive Chair of BCAL commented “We will continue to work closely with leading scientists and doctors as our science team further optimises the test to make it more cost-effective when it is launched as a patient friendly blood test for detecting breast cancer”. Shares are trading 68.8 per cent higher at 13.5 cents.

Nova Eye Medical (ASX:EYE) announced that following the US launch of iTrack™, total USA sales in the three months to 31 July 2023 were approx. US$2.2 million, up 32% on the prior corresponding period. In response, Managing Director, Tom Spurling, commented: “We will continue to reactivate inactive customer accounts before turning our focus to win new customer accounts in the remainder of the calendar year.” Shares are trading 12 per cent higher at 28 cents.

Commodities and the dollar

Gold is trading at US$1985.70 an ounce.

Iron ore is 0.5 per cent lower at US$109.55 a tonne.

Iron ore futures are pointing to a 0.4 per cent fall.

One Australian dollar is buying 66.17 US cents.