Australian sharemarket sharply lower, resources stocks hit hard, EML Payments hammered on regulatory problem

The ASX was smashed lower, with one company plunging more than 45 per cent. Here’s what caused the broader slump.

The Australian sharemarket snapped its three-day winning streak, plunging at open of trade and tracking lower after a brief morning blip higher

The S&P/ASX200 sank 1.9 per cent lower to 6931.7 while the All Ordinaries Index slumped 1.83 per cent to 7165.7.

CommSec analyst Steve Daghlian said the fall was significant, sending the benchmark S&P/ASX200 index well below the key 7000-point level.

“There was perhaps no fresh catalyst for the declines but we did see the US market falling back about 1 per cent last night. There’s still some concerns overseas about a faster than expected lift in inflation as well,” Mr Daghlian said.

He said the local bourse had cautiously edged higher earlier this week but today’s losses easily wiped out those gains.

Wage growth figures released on Wednesday showed a slightly bigger than expected lift of 0.6 per cent over the past quarter but only up about 1.5 per cent over the year, an improvement from a 23-year low of 1.4 per cent.

Resources stocks, which were the top performers yesterday, were hit hard.

Resources stocks were hard hit.

Gold miner St Barbara slumped 6.97 per cent to $1.73 a day after issuing a full year production guidance downgrade for its Leonora operations in Western Australia and Simberi mine in Papua New Guinea, with costs estimates for both projects upped.

Rio Tinto fell 3.75 per cent to $123.88, BHP erased 3.42 per cent to $48.79 and Fortescue shed 3.14 per cent to $22.83.

In the energy sector, Woodside backtracked 2.57 per cent to $22.40, Oil Search retreated 4.05 per cent to $3.79, Origin Energy gave up 4.88 per cent to $3.90, Santos declined 2.23 per cent to $7.03 and Beach Energy lost 1.52 per cent to $1.29.

ANZ dropped 1.4 per cent to $27.31, Commonwealth Bank slid 2.5 per cent to $95.32 after hitting record highs in the previous two sessions, National Australia Bank eased 1.33 per cent to $26.02 and Westpac was 1.1 per cent weaker at $25.18.

Pre-paid payments service EML Payments plummeted 45.6 per cent to $2.80 after announcing its Irish subsidiary PFS Card Services (Ireland) Ltd had received correspondence from the Central Bank of Ireland raising big regulatory concerns relating to anti-money laundering and counter terrorism financing.

The company said it was unable to estimate the potential financial impact of the matter on its full year results.

Webjet shares managed to claw higher despite the travel company posting a substantial loss. Picture: Daniel Slim/AFP

OMG chief executive Ivan Tchourilov said EML was the single most-traded stock in his company’s client based “by quite some margin”.

Webjet delivered its results for the past nine months, reporting an underlying net loss of $88.8m, from $42.3m previously, due to the impact of COVID-19 on the global travel industry.

It said cost reductions under way in all of its businesses were expected to cut expenses by 20 per cent once the business returned to scale, describing itself as “agile, energised and ready to go” for the travel recovery.

Shares in Webjet lifted 0.64 per cent to $4.70.

RBC Capital Markets noted the performance of the group’s OTA (online travel agency) business continued to improve, with domestic bookings almost back to pre-pandemic levels.

On the outlook, RBC said there was strong pent-up demand for travel, the structural shift to online continued and there was hope vaccine rollouts would allow travel markets to reopen.

Clothing retailer Kathmandu eased 0.34 per cent to $1.48 after announcing the boss of its Rip Curl business, Micheal Daly, had taken the helm of the group.

He replaces Xavier Simonet, who announced his resignation in November to lead Austrade and worked his last day with the retailer in April.

Rip Curl boss Michael Daly now holds the top job for the whole Kathmandu group. Picture: Brendon Thorne/Bloomberg

A top performer was artificial intelligence and machine learning outfit Appen, which unveiled a new organisational structure and financial reporting changes it promised would provide greater visibility of the drivers and performance of the business.

“It has reaffirmed its guidance for its results as well but also said it’s going to start reporting in US dollars rather than Aussie dollars,” Mr Daghlian said.

“The reason for that? It makes 90 per cent of revenue in the United States and most of its assets are also denominated in US dollars.”

Shares in Appen surged 17.44 per cent to $13.20.

Among market heavyweights, biotech giant CSL fell 1 per cent to $274.45 while Bunnings owner Wesfarmers slipped 0.8 per cent to $53.56.

The Aussie dollar was fetching 77.83 US cents, 54.85 British pence and 63.56 Euro cents in afternoon trade.