Bound to happen: ASX snaps seven-day winning streak

The ASX fell for the first time in eight days, with analysts saying that was bound to happen after a strong winning streak.

The Australian sharemarket has snapped its seven-day winning streak, the year’s longest, prompting analysts to say a fall was bound to happen.

The S&P/ASX200 closed 0.67 per cent lower at 6683.1 while the All Ordinaries Index fell 0.69 per cent to 6917.1.

“It was bound to happen eventually,” CommSec analyst Steve Daghlian said.

“The market hit fresh nine-and-a-half month highs not only on Monday but also on Wednesday … it’s a lot to do with positive vaccine news, the reopening of borders and the fact we’re keeping coronavirus case numbers in Australia very low indeed.”

ThinkMarkets Australia analyst Carl Capolingua said it was a disappointing session.

“The weakness is understandable though,” Mr Capolingua said.

“We know volumes start to thin out around this time of the year and that makes us more vulnerable to volatility.

“We’re still sitting on some good gains and a few of the charts, particularly in the materials sector, are looking stretched.

“So a pullback which knocks out a few of the shorter-term traders wouldn’t necessarily be a bad thing here.

“There are going to be uncertain moments between now and the end of the year, but the broader trend remains up.”

Mark Brayan, chief executive of artificial intelligence services company Appen, which issued an earnings downgrade. Picture: John Feder/The Australian

Mr Capolingua said the tech sector went from bad to worse, starting with a major negative lead from the Nasdaq index in the US, followed by an earnings downgrade from artificial intelligence services company Appen, which had been one of the key leaders in the tech rally that started in March.

“Its updates until today, including first half results as recently as August, have been extremely solid,” he said.

“Appen noted the pandemic is undermining business confidence in the US, their main market, and it’s impeding their ability to service customers.

“So, when you look at it, if the leader is struggling, what does that say for the rest of the sector?”

Appen shares plunged 12.43 per cent to $26.20.

Gold stocks were among the losers. Picture: Tony McDonough/AAP

Gold miners were weaker, with Ramelius Resources dropping 8.45 per cent to $1.62, Saracen Minerals slipping 5.75 per cent to $4.59 and Northern Star shedding 5.62 per cent to $12.27.

Fortescue was a big winner, surging 3.26 per cent to close at a record high of $22.51.

Rio Tinto weakened 0.04 per cent to $115.39 and BHP retreated 0.59 per cent to $42.48.

Penfolds owner Treasury Wine Estates dipped 2.05 per cent to $9.09 after China’s Ministry of Commerce said it would slap “temporary countervailing measures” on Australian wine from Friday.

ANZ eased 0.56 per cent to $23.17, Commonwealth Bank softened 0.11 per cent to $83.09, National Australia Bank put on 0.43 per cent to $23.54 and Westpac dipped 0.4 per cent to $19.99.

The Aussie dollar was buying 74.71 US cents, 55.9 British pence and 61.75 Euro cents in afternoon trade.