Miners weigh on ASX as $A slumps to nine-month low

Welcome to your five-minute recap of the trading day, and how experts saw it.

The numbers:

The Australian sharemarket started the week on the back foot as miners, banks and industrials dropped and Wall Street closed out its second consecutive losing week.

The S&P/ASX 200 was down 63.1 points, or 0.9 per cent, to 7277.0 at the close on Monday as all sectors except energy, information technology and communication services traded in the red. The Australian dollar slumped to a nine-month low of US64.61¢ during the session, after falling more than 1 per cent last week.

Mining companies were the heaviest weight on the ASX on Monday.Credit: Ian Waldie

The lifters

Communication services (up 0.8 per cent) was the strongest sector on the local bourse as Carsales.com added 7 per cent after its profit jumped 301 per cent to $636 million for the year. Seek (up 0.6 per cent) and Telstra (up 0.2 per cent) also lifted the sector.

Energy companies (up 0.5 per cent) were also stronger as heavyweights Woodside (up 1 per cent) and Santos (up 0.3 per cent) advanced following a 0.2 per cent rise in Brent Crude oil prices.

JB Hi-Fi bucked the trend among consumer stocks, climbing 2.8 per cent after it reported a 4.3 per cent jump in revenue to $9.6 billion.

The laggards

Meanwhile, miners (down 1.7 per cent) were the heaviest weight on the index as lithium producers Pilbara Minerals (down 6 per cent) and Allkem (down 3.9 per cent) both fell. Iron ore heavyweights BHP (down 2.1 per cent), Fortescue (down 1.8 per cent) and Rio Tinto (down 2.3 per cent) also declined.

Industrials (down 0.8 per cent) were among the weakest on the index as Aurizon Holdings (down 3 per cent) and Qube Holdings (down 2.8 per cent) slid lower. Aurizon shares sank after its net profit fell 46 per cent to $276 million, which included discontinued operations.

The big four banks were also weaker amid a 0.8 per cent fall in the financials sector. CBA lost 0.7 per cent, NAB dropped 0.8 per cent, Westpac slipped 1.1 per cent and ANZ declined 0.9 per cent.

Shares in horticulture giant Costa Group sank 1.8 per cent after giving an update to the market about a potential $1.6 billion takeover from US private equity firm Paine Schwartz.

“There continues to be no certainty that the indicative proposal will result in a binding offer or that any transaction will eventuate,” the company said in a statement on Monday. “Costa will continue to keep the market informed in accordance with its continuous disclosure obligations.”

The lowdown

EToro market analyst Josh Gilbert said the market had a weak lead from Wall Street and ended lower but that there was some optimism in the morning.

“JB Hi-Fi and Carsales.com reported quite positive numbers and showed resilience during this reporting season,” he said. “But by mid-afternoon, there was some negativity from China where their property slump is worsening.”

Gilbert said a fall in the iron ore price weighed on the materials sector, along with fading hopes of stimulus from China.

However, he said energy companies rallied on the back of strong oil prices as major producers Saudi Arabia and Russia stuck to their output cuts.

A choppy day of trading on Wall Street ended on Friday with an uneven finish for the major stock indexes, as mixed economic data stoked worries that the Federal Reserve’s work on bringing inflation to heel isn’t done.

The S&P 500 slipped 0.1 per cent after wavering between small gains and losses most of the day. The benchmark index fell 0.3 per cent for the week, its second consecutive losing week.

The Nasdaq Composite fell 0.7 per cent, reflecting a pullback in big tech companies. The Dow Jones Industrial Average eked out a 0.3 per cent gain.

Tweet of the day

Quote of the day

“It’s just absolutely challenging out there ... We anticipate that it is going to remain more challenging in the market,” said the chief executive of electronic retailer JB Hi-Fi, Terry Smart, after it surprised the market with better-than-expected results.

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Australia’s grocery sector is expected to come under increased public scrutiny when supermarket giants Coles and Woolworths report their annual profits later this month, but analysts believe cost pressures could slow the sector’s momentum.

With AP, Reuters

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