Australian sharemarket pulls back, loses momentum after last week’s charge to 13-month highs

The ASX ran out of steam after last week’s stunning run, with analysts saying investors may have been crystallising their gains today.

The ASX ran out of steam after last week’s stunning run. Picture: NCA NewsWire/Christian Gilles

The Australian sharemarket pulled back after reaching fresh 13-month highs last week, with the materials sector weighing on the market.

The S&P/ASX200 finished 0.3 per cent lower at 6974 while the All Ordinaries Index dipped 0.37 per cent to 7225.2.

ThinkMarkets Australia analyst Carl Capolingua said it was a pretty quiet day on the local bourse, which basically tracked US futures lower.

Futures responded to US Federal Reserve chairman Jerome Powell saying in a 60 Minutes interview it was ”highly unlikely we would raise rates this year”, which was surprising, Mr Capolingua said, given the central bank had “been more along the lines of ‘zero chance’ of a rate hike this year”.

All things considered, it was not a terrible performance on the ASX on Monday, Mr Capolingua said.

“Don’t forget we were up 3 per cent last week,” he said.

“There could have been a little profit taking out there today.

The futures market read a lot into comments by US Federal Reserve Chairman Jerome Powell. Picture: Eric Baradat/AFP

“We’re set up pretty well here: We’ve broken above key chart resistance at 6938, and we’ve got some really supportive fundamental factors behind us.

“Markets are always going to jump at the occasional shadow, but possibly the biggest risk for investors right now is not being invested ... I think you can keep buying these little pull backs.”

OpenMarkets Group chief executive Ivan Tchourilov said overall momentum has slowed after last week’s steady roll, but agreed the market was still looking strong technically.

“Many of the top 20 are now near pre-COVID levels which has helped the overall market push higher,” Mr Tchourilov said.

“Banks have seen a strong recovery, fuelled by a combination of monetary and fiscal stimulus as well as a surge in new home loan applications.

“Financial stocks continue to outperform the broader market and have basically recovered the losses they incurred last year.”

ANZ added 0.45 per cent to $28.87, Commonwealth Bank eased 0.47 per cent to $86.72, National Australia Bank put on 0.41 per cent to $26.83 and Westpac firmed 0.36 per cent to $25.30.

The big four banks were a mixed bag. Picture: NCA NewsWire/Sarah Matray

Rio Tinto softened 0.54 per cent to $114.88, BHP dropped 1.05 per cent to $46.18 and Fortescue backtracked 1.63 per cent to $20.55.

Gold Road Resources fell more than 2 per cent to $1.21 after saying it had made a bid for IGO Ltd’s stake in the huge Tropicana mine in Western Australia but no deal had been reached.

Crown Resorts announced Bruce Carter, who was previously deputy chair of SkyCity Entertainment Group and known as “Mr Fix-it” in South Australia under the Rann government, had joined the board as a non-executive director.

Also, the WA royal commission into Crown kicked off but substantive hearings aren’t expected to be heard until next month.

Shares in the casino operator slipped 0.9 per cent to $12.09.

Crown Resorts is now in the midst of two royal commissions, with the WA probe starting on Monday. Picture: NCA NewsWire/David Crosling

Renewable energy company Delorean Corporation made a stellar ASX debut, closing at 42 cents after raising $14m from the issue of 70 million shares at a price of 20 cents each.

The offer was oversubscribed multiple times, managing director Joe Oliver said.

The company has projects under construction for third parties in South Australia and New Zealand, two ‘shovel ready’ projects in SA and Victoria, and another two in its development pipeline over the next 12 months.

In the healthcare sector, Cochlear advanced 2.42 per cent to $221.76, CSL lifted 0.8 per cent to $265.50 and ResMed rose 1.5 per cent to $26.36.

The Aussie dollar was fetching 76.16 US cents, 55.51 British pence and 64 Euro cents in afternoon trade.