ASX200 slumps on weaker than expected earnings results

The major banks and miners continued to slump on Thursday, dragging the Australian share market to its lowest point in five weeks.

A sell-off in banks and miners saw the Aussie sharemarket fall for the fourth consecutive trading period on Thursday, to a five-week low.

The benchmark ASX 200 index traded heavily in the red dropping 96.40 points or 1.15 per cent to 8322.80

The broader All Ordinaries fared marginally better down 97.40 points or 1.12 per cent to close the day at 8601.70.

The Aussie dollar is trading around US63.65c.

Some of Australia’s largest company’s dragged the index into the red. Picture Newswire/ Gaye Gerard.

In a broad market sell off, seven of the 11 sectors closed Thursday in the red, with Australian property REITs, healthcare and financials all dropping by more than 2 per cent.

On the flip side it was a strong day for the telecommunications sector, dragged higher by a stronger than expected result from Telstra.

In an announcement to the ASX on Thursday, Telstra said revenue firmed 1.5 per cent to $11.6bn in the six months to December 31, while net profit after tax was up 7.1 per cent to $1.1bn for the half year.

Meanwhile Wesfarmers defied the cost of living pressures facing households, announcing strong results out of its Bunnings, Kmart and Officeworks businesses.

eToro’s market analyst Farhan Badami said Wesfarmers delivered a resilient performance in the first half of FY25, with net profit rising 2.9 per cent to $1.467bn despite these pressures.

“The retail giant’s value-focused strategy is paying off with its largest divisions such as Bunnings and Kmart delivering strong growth in transactions and sales due to cost-conscious consumers gravitating towards their value offerings,” he said.

Seven of the 11 sectors finished in the red. Picture Newswire/ Gaye Gerard.

On a day dominated by negative news, the market sell-off continued, especially in the banking sector.

Following an announcement from ANZ which showed gross impaired assets rose by $200m to $1.9bn, mainly due to Australian mortgage restructures, the banks dropped on fears of bad loans.

ANZ slumped 3.1 per cent to $29.21, Westpac dropped 3 per cent to $31.22 and NAB cratered 3.3 per cent to $35.11. Australia’s largest bank Commonwealth Bank was the strongest performing but still fell 2.02 per cent to $155.73.

The major miners also traded in the red.

Rio Tinto dropped 1.53 per cent to $120.09 on the back of its full-year earnings.

eToro market analyst Mark Crouch was upbeat about the company’s earnings as the mining giant reported a 15 per cent jump in net profit year-over-year.

“Despite commodities facing a particularly poor year, Rio Tinto outperformed many major players,” he said.

“As one of the top global producers of aluminium and iron ore, the latter of which saw lower production due to softening demand and adverse weather conditions affecting shipping, Rio Tinto still managed to maintain production levels and capitalise on the stronger prices of copper and aluminium.”

Fortescue Metals announced its half year results showing net profits is down 53 per cent compared to this time last year to $US1.6bn. The weakness came out of a falling iron ore price over the half year, which saw the stock tumbling 6.2 per cent to $18.24.

Magellan shares tumbled 10.1 per cent to $9.08, after statutory net profits fell 10 per cent compared to the corresponding period according to the company’s interim result.

Super Retail Group was the worst performing share on the ASX 200 slumping 12.47 per cent to $14.17 after the owner of Super Cheap Auto, Rebel, BCF and Macpac first half results showed inflationary pressures means the business has to keep running promotions to move merchandise.

Bunnings, Kmart grow in challenging environment

Originally published as ASX200 slumps on weaker than expected earnings results