Australian sharemarket eases as investors stay ‘cautious’ after strong recovery

The Australian sharemarket lost ground today after a shaky session, as investors cautiously await commentary from the US central bank.

The Australian sharemarket pulled back on Wednesday after a shaky session on Wall Street, with local investors remaining cautious ahead of key economic news out of the US.

The S&P/ASX200 closed 0.47 per cent lower at 6795.2 while the All Ordinaries Index eased 0.44 per cent to 7048.

OpenMarkets Group chief executive Ivan Tchourilov said US markets were mixed overnight and all eyes were on the Federal Open Market Committee meeting, with economic projections and a press conference due out Thursday morning AEDT likely to dictate market direction in the short term.

Locally, investor caution continued after such a strong recovery from the COVID low seen in March last year, Mr Tchourilov said.

The big miners again weighed on the market, with Rio Tinto shedding 0.95 per cent to $111.79 and BHP falling 1.64 per cent to $46.07.

Other miners with notable losses included South32, down 2.87 per cent at $2.71, and Evolution Mining dropping 3.13 per cent to $4.02.

After the oil price dipped, Santos gave up 0.82 per cent to $7.23, Woodside Petroleum softened 0.87 per cent to $24.97, Origin backtracked 2.52 per cent to $4.64 and Oil Search slid 2.47 per cent to $4.34.

Corporate Travel Management plunged into the red as border closures halted travel. Picture: NCA NewsWire/Bianca De Marchi

Shares in Corporate Travel Management slumped 5.58 per cent to $21 after the company reported a half-year net loss of more than $36m, a reversal of fortunes compared to a near $33m net profit for the previous corresponding period, due to COVID-19 border restrictions.

“We are in a good position to capitalise on a recovery in corporate travel activity because we have a strong balance sheet with excess cash for further opportunities,” managing director Jamie Pherous said after selling down his stake in the company from 15.2 per cent to 14.1 per cent.

Fonterra reported a 22 per cent drop in net profit for the six months to January 31 and said it had decided to sell its joint venture farms in China in line with the cooperative’s strategy to focus on New Zealand milk.

It warned increasing raw milk prices through the first half and into the second half put “a lot of pressure” on sales margins.

Shares in Fonterra appreciated 1.08 per cent to $4.70.

Fonterra warns high raw milk prices are putting the squeeze on its second half earnings. Picture: Zoe Phillips

Commonwealth Bank inched 0.08 per cent lower to $87.11 after announcing a buy-now-pay-later product to be released mid-2021.

“This will rival the likes of Afterpay and Zip, allowing up to four million customers to pay for products over four equal instalments,” Mr Tchourilov said.

“While BNPL is getting quite crowded in Australia, there are major markets overseas, with global retail spending currently sitting at circa $US9 trillion ($A11.65 trillion) a year — 60 per cent of that coming from North America.

“As such, Australia is becoming a bit of a proving ground for BNPL companies, which then roll out their products overseas in an attempt to gain a slice of a much bigger pie.”

Afterpay gained 1.15 per cent to $112.99 but Zip retreated 1.83 per cent to $8.59.

ANZ gave up 0.67 per cent to $28.37, National Australia Bank was just one cent lower at $26.24 and Westpac declined 0.24 per cent to $24.67.

Westpac announced it had combined its consumer and business divisions to simplify the bank’s structure and help reduce costs, including by consolidating support functions.

The Aussie dollar was fetching 77.32 US cents, 55.66 British pence and 64.95 Euro cents in afternoon trade.

Originally published as Australian sharemarket eases as investors stay ‘cautious’ after strong recovery