Australian sharemarket dips, travel stocks hit by Brisbane lockdown but resources sector outperforms

The ASX slid lower after the snap lockdown in Brisbane hit travel stocks, but the resources sector outperformed and Mortgage Choice rocketed.

The Australian sharemarket dipped despite a strong positive lead from Wall Street, weighed down by travel stocks after Brisbane announced a snap three-day lockdown due to a spike in COVID-19 community transmission.

The S&P/ASX200 closed 0.36 per cent lower at 6799.5 while the All Ordinaries Index declined 0.38 per cent to 7036.4.

OpenMarkets Group chief executive Ivan Tchourilov said the lockdown was a heavy blow for the already hard-hit tourism industry, especially just before the Easter long weekend.

Flight Centre fell 3.03 per cent to $17.95, Webjet gave up 2.79 per cent to $5.57, Regional Express declined 3.17 per cent to $1.53, Corporate Travel Management backtracked 1.56 per cent to $19.58 and Qantas retreated 0.78 per cent to $5.07.

After the massive ship blocking the Suez Canal was freed by a salvage team, ThinkMarkets Australia analyst Carl Capolingua noted there were fears the debacle would put further upwards pressure on already spiking shipping rates, put increased pressure on supply chains and ultimately feeding into inflation.

The colossal container ship, the Ever Given, has been freed from the Suez Canal, one of the world’s busiest shipping lanes. Picture: Satellite image Maxar Technologies/AFP

“Of course, there’s always a plus and a minus in markets, and we’ve seen the oil price pull back below $US60 per barrel again,” Mr Capolingua said.

Origin Energy slipped 0.85 per cent to $4.69 and Oil Search softened 0.71 per cent to $4.19 but Santos added 0.7 per cent to $7.21.

Miners performed strongly amid higher commodities prices, with Mineral Resources advancing 2.54 per cent to $37.94, OZ Minerals adding 2.46 per cent to $23.33, Fortescue rising 2.13 per cent to $20.58, BHP gaining 1.75 per cent to $45.86 and Rio Tinto putting on 1.75 per cent to $112.26.

“I think the materials sector could be the one to watch this week,” Mr Capolingua said.

“It’s had a pullback since the commodities super-cycle hype reached fever pitch at the start of March.

“We don’t necessarily need a super cycle for the materials sector to do well.

“If prices even just stay where they are, that will be enough to keep profit growth ticking along.”

An expected surge in construction next year will boost miners and steel makers, an analyst says.

BlueScope Steel appreciated 3.25 per cent to $20.01 and fellow metal producer Sims Metal Management added 3.85 per cent to $14.85.

Mr Capolingua said BlueScope, Alumina and South32 were worth keeping an eye on ahead of an expected significant uptick in construction next year as governments looked to invest heavily in infrastructure projects and further support the home building industry.

“These sectors are major employers,” he said.

“Governments are in effect going to try to build their economies out of the recession.”

Alumina gained 2.31 per cent to $1.77 and South32 rose 3.27 per cent to $2.84.

AMP dropped 3.35 per cent to $1.30 after the 30-day exclusivity agreement for its planned sale of AMP Capital to Ares Capital Management expired with no deal sealed.

“Ares has expressed interest in acquiring 100 per cent of the private markets business. There is no certainty that a transaction will proceed,” the ailing financial services group said.

Mortgage Choice rocketed 62.55 per cent to $1.91 after realestate.com.au owner REA Group lobbed a $1.95 per share takeover offer, valuing the mortgage broker at $244m.

Mortgage Choice has recommended the deal to shareholders, saying REA Group’s websites have an already engaged audience. Picture: Ellen Smith

“Joining the REA network creates a significant opportunity to leverage its deep digital capabilities and expertise, combined with access to a large and engaged consumer audience,” Mortgage Choice chair Vicki Allen said.

REA Group, which is majority held by News Corp, the owner of this title, declined 1.86 per cent to $137.45.

Poultry producer Inghams Group shed 4.72 per cent to $3.43 after announcing chief executive Jim Leighton had left the company and was returning to the US for personal reasons.

He’s being replaced by non-executive director Andrew Reeves.

Tabcorp Holdings announced a strategic review, saying options could include selling its wagering and media business or a demerger.

The review has been sparked by previous unsolicited approaches for the wagering and media division, which valued it at $3bn but were not adequate, Tabcorp said.

Shares in the company were down 2.7 per cent at $4.69.

ANZ slid 0.64 per cent to $27.99, Commonwealth Bank retreated 0.5 per cent to $85.57, National Australia Bank eased 0.15 per cent to $26.13 and Westpac was steady at $24.34.

The Aussie dollar was buying 76.18 US cents, 55.33 British pence and 64.67 Euro cents in afternoon trade.