Banks slump as ASX retreats from record levels; AMP surges

Welcome to your five-minute recap of the trading day.

The numbers

The Australian sharemarket has been unable to maintain is rally into record territory, with most sectors losing ground, led by financial stocks.

The ASX 200 closed 89 points, or 1 per cent, lower, to 8668.2, with nine of the 11 industry sectors in the red. The broader All Ordinaries fell 80.6 points, or 0.9 per cent, to 8926.2.

The Australian dollar was buying US65.18¢, from US65.02¢ at 5pm on Friday.

Trade war uncertainty continues to hover over world markets.Credit: AP

The laggards

The financial sector was the biggest loser, dropping 2.4 per cent. The big four banks ended the session sharply lower, with Westpac falling 3.6 per cent, ANZ down 2.5 per cent, NAB giving up 2.4 per cent, and Commonwealth Bank – the largest stock on the ASX – losing 2.5 per cent.

Financial services group Insignia was the worst performer on Monday, falling 5.8 per cent, followed by investment management group Pinnacle, down 5.3 per cent.

Healthcare also lost ground, down 0.9 per cent, with CSL 0.8 per cent weaker and biotech Mesoblast losing 4.1 per cent.

Wesfarmers (down 1 per cent), Aristocrat Leisure (down 1. 4 per cent) and JB Hi-Fi (1.5 per cent weaker) helped push consumer discretionary stocks 1.2 per cent lower.

The lifters

Energy was the strongest sector, gaining 1.1 per cent on Monday, and 3.4 per cent over the past five days. Woodside was 1.4 per cent higher, and Santos edged 0.3 per cent.

Materials was the only other sector to finish in the green, up 0.4 per cent, boosted by the heavyweight miners. BHP gained 0.4 per cent, Fortescue 1.5 per cent, and Rio Tinto was 1.2 per cent higher.

Liontown Resources was the ASX’s top performer, gaining 11.4 per cent. South32 was up 4.5 per cent and Yancoal rose 4.1 per cent.

Fintech giant Block was in the best top five, surging 11.2 per cent, as was AMP, which jumped 9.8 per cent after the wealth management business reported higher cashflow and assets under management on its platforms business.

The company said net cashflow for the platforms business rose 63.2 per cent in the second quarter, to $1.57 billion, while assets under management increased by 5.6 per cent.

AMP chief Alexis George highlighted the increase, as well a strong performance in its superannuation business.

“In our superannuation business, we’ve reached a significant milestone, delivering positive net cashflows for the quarter, for the first time since 2017,” George said.

The lowdown

The local bourse has been unable to push further into record territory, suffering its biggest loss in three months following a rally in the previous session.

The past two trading days have seen similar see-saw action to a pair of days in early April. Monday’s losses were the ASX 200’s most severe since a 1.8 per cent drop on April 9, while Friday’s 1.4 per cent gains were the index’s best since a 2.3 per cent rally on April 8.

At the start of a busy week for markets, investor focus will be firmly on Trump’s global tariff salvos after a Financial Times report last week indicating the US president was pushing for steep new tariffs on European Union products.

Attention would be fully captured by stocks this week as US company reporting season hit full stride and a number of important Australian companies addressed shareholders, Moomoo market strategist Michael McCarthy said.

It might be a hectic week for markets, he said, with a number of US Federal Reserve board members speaking publicly, the release of New Zealand inflation data, as well as a gauge of Australian and US business activity known as the purchasing manager index.

On Friday on Wall Street, the S&P 500 and Nasdaq ended largely unchanged, having dipped earlier after the report indicated Trump was pushing for steep new tariffs on European Union products.

The Financial Times report, which said the Trump administration was eyeing a minimum tariff of 15 to 20 per cent in any deal with the European bloc, sent markets lower before they partly recovered. US Commerce Secretary Howard Lutnick said on Sunday he was confident the US could secure a trade deal with the European Union, but said August 1 was a hard deadline for tariffs to kick in.

According to preliminary data, the S&P 500 lost 1.16 points to end at 6296.20 points, while the Nasdaq Composite gained 9.33 points, or 0.1 per cent, to 20,894.98. The Dow Jones Industrial Average fell 142.40 points, or 0.3 per cent, to 44,342.09.

Reports suggest Donald Trump was pushing for steep new tariffs on European Union products.Credit: AP

Both the S&P 500 and Nasdaq have been pushed to repeated record highs in recent weeks, as investors showed increased ambivalence to Trump’s tariff threats and confidence that these policies may not damage the US economy as severely as once feared.

Still, this week was seen as a proving ground for how Trump’s economic policies were filtering into the wider economy.

A raft of economic data has offered mixed signals, including robust retail sales, a rise in consumer inflation and flat producer prices for June.

The University of Michigan’s Consumer Sentiment Index increased this month, though consumers were still worried about future price pressures.

Earnings season began this week, giving an opportunity to US corporations to showcase how tariffs were, or were not, affecting their businesses.

Industrial giant 3M fell after the company said the impact of tariffs will mostly be felt in the second half of the year.

“People are a little tired of trying to trade tariff headlines or deadlines, and people are more concerned with seeing the proof of this come to fruition through numbers,” said Greg Boutle, head of US equity and derivative strategy at BNP Paribas.

Of the 59 S&P 500 companies to first report second-quarter earnings this season, more than 81.4 per cent have topped Wall Street’s earnings expectations, according to LSEG I/B/E/S data.

Charles Schwab was among the latest on Friday, advancing after posting higher profits. Regions Financial jumped after raising its forecasts for 2025 interest income.

The week has shown, though, that beating estimates is not a recipe for trading higher. American Express outpaced second-quarter profit estimates but its shares dropped. Netflix fell despite the success of Squid Game helping the company surpass earnings forecasts. The streaming company also lifted its annual revenue outlook.

Elsewhere, cryptocurrency stocks, including Robinhood Markets and Coinbase Global, rose after the US House of Representatives passed a bill that would develop a regulatory framework for cryptocurrencies.

Of the S&P sectors in positive territory, utilities was the biggest gainer.

Energy led those in the red. It was weighed down by SLB, which fell after reporting lower quarterly profit and a downbeat outlook, and Exxon Mobil, which slumped after losing a landmark legal battle over Chevron’s acquisition of Hess.

With Reuters

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