Home Business ASX falls again, down 1.2pc

ASX falls again, down 1.2pc

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The local bourse has sunk to a nearly two-month low, as last week’s rollercoaster ride shows no signs of abating.

The benchmark S & P / ASX 200 index closed down 85 points to 7,120.6, a loss of 1.2 per cent.

The broader All Ordinaries index fell 109.7 points to 7,357.9, a 1.5 per cent decline.

The ASX has now lost ground on five of its last six sessions, and eight of the last 11, falling 6.4 per cent in a little over two weeks to hit its lowest level since March 15.

“Another down day,” said Jessica Amir, Australian market strategist at Saxo Markets. “At least we did not finish on the low of the day, which was pleasing, but things are pretty grim for the Australian market, as they are for the US market.”

That’s because earnings growth is slowing, China is enacting new COVID lockdowns and central banks in the US and Australia are hiking interest rates, Ms Amir said.

Every sector except healthcare was in the red. Property trusts were the biggest loser, collectively falling 4.2 per cent as warehouse company Goodman Group dropped 7.0 per cent to a nearly one-year low of $ 19.16.

Tech stocks as a whole dropped 3.2 per cent to their lowest level since June 2020, as rising interest rates make growth companies unappealing.

Xero dropped 2.6 per cent to a near two-year low of $ 84.34, while Wisetech Global fell 4.9 per cent to a nine-month low of $ 39.33

Airtasker, Booktopia, Tyro Payments, Betmakers Technology, EML Payments, Whispir, Redbubble, Domain, Bigtincan, Humm, Bike Exchange, Netwealth, Nuix, Pointsbet, and Kogan.com were among the tech or tech-focused names hitting new 52-week or all-time lows on Monday, along with Inghams, Nine Entertainment, Star Entertainment, Harvey Norman, James Hardie, Judo Capital, Collins Foods, Breville, Marley Spoon and Aristocrat Leisure.

Westpac had a good day, however, rising 2.4 to a six-month high of $ 24.41 after beating expectations with a 12 percent drop in first half cash earnings to $ 3.1 billion.

Chief executive Peter King said Australia’s oldest company was “managing through the low-rate environment and making the changes required to become a simpler, stronger bank”.

NAB and CBA both staged an afternoon comeback to finish in the green, with NAB rising 0.2 per cent to $ 31.68 and CBA climbing 0.3 per cent to $ 102.66. ANZ dropped 2.7 per cent to $ 26.03 as the bank went ex-dividend.

Magellan Financial Group dropped 8.4 per cent to $ 15.80 after announcing it had sold its 11.6 per cent stake in Mexican fast food restaurant chain Guzman y Gomez to Barrenjoey Capital for $ 140 million, a 36.3 per cent premium to its entry price 16 months ago.

Blood products giant CSL climbed 0.8 per cent to $ 270.40.

The heavyweight mining sector was down 2.1 per cent as Fortescue Metals fell 5.8 per cent to a five-week low of $ 19.63.

Ms Amir said the lockdowns in China had sent the price of iron ore to its lowest level since February.

“Such a huge fall from grace – so that means forward-looking earnings from the big miners are going to be darker,” she said.

BHP dropped 1.3 per cent to $ 46.21, while Rio Tinto fell 2.3 per cent to $ 106.80 and South32 was flat at $ 4.63.

AI chip technology company Brainchip Holdings rose for the third straight session, at 14.15 per cent a two-month high of $ 1.21.

A message board favorite, Brainchip told the ASX on Friday it had no explanation for the recent run-up in its shares.

AUB Group shares went into a trading halt after the insurance company agreed to buy London-based international insurance broker Tysers for $ 880 million.

The Australian dollar meanwhile had tumbled to a key support of just above 70 US cents, a level it last touched briefly in late January. It has not slid below that level since the start of the pandemic, in July 2020.

The Aussie was buying 70.09 US cents, from 70.70 US cents on Friday, and had lost ground against the euro and yen as well.

Looking forward, Australian consumer confidence figures will be released on Wednesday, and then that night (Australia time), inflation data for April will be released in the United States.

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