Australian sharemarket slides lower from last week’s record-breaking finish

The ASX closed firmly in the red after ending last week at fresh record highs, with banks and energy stocks among the big weights.

The Australian sharemarket closed in the red, snapping a four-day winning streak and following fresh record highs last week.

The benchmark S&P/ASX200 index closed 0.61 per cent lower at 7582.5 after finishing above 7600 points for the first time ever on Friday – when it had an all-time closing peak of 7628 – while the All Ordinaries Index dropped the same amount to 7849.6.

CommSec analyst James Tao said financial stocks were a major weight on the market.

Bendigo and Adelaide Bank slumped 9.9 per cent to $10 despite booking a surge in full-year cash earnings and S&P Global Ratings, saying its continuing investment in technology positioned it well for ongoing above-system growth.

The ratings agency said the bank’s earnings remained sound relative to mid-size domestic peers and it had low levels of arrears across its lending portfolios.

“It did see a slight dip in its net interest margins and it’s also somewhat cautious for the financial year ahead because of the pandemic lockdowns that we’re seeing,” Mr Tao said.

ANZ slid 2.7 per cent to $28.73, Commonwealth Bank gave up 1.43 per cent to $102.54 and Westpac shed 1.4 per cent to $25.79 but National Australia Bank inched two cents higher to $27.72.

Sydney Airport’s board rejected an improved takeover offer, saying it undervalued the company. Picture: Flavio Brancaleone / NCA NewsWire

Travel stocks were lower amid worrying Covid-19 developments around the nation, including Greater Darwin and Katherine being plunged into a three-day lockdown at short notice, NSW recording 478 new locally acquired cases and Canberra’s lockdown being extended by a fortnight.

Qantas fell 1.76 per cent to $4.46, Webjet declined 3.3 per cent to $4.98, Flight Centre sank 5.27 per cent to $14.37 and Sydney Airport slipped 0.65 per cent to $7.70 after rejecting an improved takeover offer by a consortium that now includes AustralianSuper of $8.45 per share.

The board said the “current environment” for the sector did not change the company’s long term value.

Beach Energy plunged 9.92 per cent to $1.09 after reporting a slump in full-year net profit and a production dip, flagging an even bigger output slide this financial year.

That assumes no exploration success at its Western Flank oil project offshore Western Australia, where the field is naturally declining, with managing director Matt Kay saying it had been a challenging year for the operation.

BHP confirmed recent media reports suggesting it was considering getting out of the petroleum business, saying various options were being looked at, including merging its oil and gas assets with Woodside in a scrip deal.

“We have been in discussions with Woodside. While discussions between the parties are currently progressing, no agreement has been reached on any such transaction,” BHP said.

After weeks of speculation, BHP has confirmed it is considering exiting petroleum altogether, on top of thermal coal. Picture: Supplied by BHP

The mining giant’s shares eased 1.4 per cent to $52.07 while Woodside backtracked 4.55 per cent to $21.18.

Rio Tinto weakened 1.55 per cent to $118.49 and Fortescue shed 1.93 per cent to $21.87.

Real estate group Lendlease released a jump in full-year net profit but it disappointed investors.

“Lendlease has managed to weather the storm from Covid reasonably well but missed the mark with their report today,” OMG chief executive Ivan Tchourilov said.

“It’s the outlook that has investors worried, which is reflected in their fall of 7.55 per cent (to $11.64) today.”

Another real estate group, GPT, also booked a substantial full-year net profit, a big turnaround from last year’s loss, sending its shares 3 per cent higher to $4.80.

BlueScope Steel firmed 0.63 per cent to $25.65 after posting a huge jump in full-year net profit, driven by strong demand and prompting the company to announce it would accelerate its growth plans.

BlueScope also announced a net zero climate change goal, an on-market share buy-back of up to $500m, a final unfranked dividend of 25 cents per share, up from 8 cents last year, plus a special unfranked dividend of 19 cents per share.

Steel producer BlueScope has announced a net zero climate change goal. Picture: Dean Lewins / AAP

“We expect BlueScope to maintain prudent financial management and generate material cash flows that will support the company’s forecasts of significant capital investments, higher dividends and increased shareholder returns,” Moody’s Investors Service senior vice-president, Matthew Moore, said.

JB Hi-Fi booked a big surge in earnings for 2020-21, driven by the well-observed pandemic trend of buying for the home, but sales for the first six-and-a-half weeks of this financial year were variable due to multiple state lockdowns, prompting the retailer to not provide a full-year guidance.

Shares in JB Hi-Fi rose 2.5 per cent to $49.53.

Mr Tao said the big winner was a2 Milk, which soared 12.08 per cent to $6.68.

“Nothing official from the company itself, but there are some media reports that Nestle is looking at potentially acquiring the infant formula and dairy company after it releases its profit results later in August,” he said.

Mr Tchourilov noted a2’s share price surge came after months of underperforming the broader market.

“It will be interesting to see if this move generates renewed confidence in the stock going forward, after falling out of favour with the market all of last year,” he said.

The Aussie dollar was fetching 73.38 US cents, 52.98 British pence and 62.24 Euro cents in afternoon trade.