ASX bounces back as banks recover, WiseTech shares tumble

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

The numbers

The Australian sharemarket rebounded from early losses to edge back above the 8300 mark, led higher by banks and utilities, while embattled software giant WiseTech plummeted more than 20 per cent after emerging from its trading halt.

The S&P/ASX 200 closed 12 points, or 0.1 per cent, higher at 8308.20, with six of its 11 industry sectors in the green. Technology stocks were preventing bigger market gains, weighed down by WiseTech, the sector’s biggest company. The Australian dollar was fetching US63.76¢.

The corporate drama around software maker WiseTech prompted a $10 billion sell-off in its shares. Credit: Dominic Lorrimer

The lifters

Gas pipeline giant APA Group led utilities higher, jumping 7.7 per cent after reporting a 9.1 per cent rise in underlying earnings to $1 billion and lifting its interim dividend by 1.9 per cent to 27¢ a share while reaffirming its profit and dividend forecasts for the full year.

The big four banks all posted solid gains, rebounding from last week’s losses over weaker-than-expected profit results from banks including Westpac, National Australia Bank and Bendigo and Adelaide Bank.

Investors saw buying opportunities after last week’s retreat, pushing Commonwealth Bank, the biggest stock on the ASX, up 3 per cent. NAB rose 2.3 per cent, ANZ gained 2.6 per cent and Westpac added 0.8 per cent.

Consumer discretionary stocks also did well, with Bunnings and Officeworks owner Wesfarmers finishing up 1 per cent, electronics retailer JB Hi-Fi rising 1.5 per cent and pokies maker Aristocrat gaining 2.9 per cent.

The laggards

WiseTech shares tumbled 20.1 per cent, leading tech stocks lower, after its shares came out of the trading halt they had been in since Thursday. The embattled software giant announced that four independent board members were leaving after failing to agree with disgraced company founder Richard White about his role.

Real estate investment trusts and energy stocks also declined as some of their biggest stocks started trading without the rights to their latest dividends. Shopping centre owner Vicinity went ex-dividend and shed 4.4 per cent, while oil and gas major Santos, also ex-dividend, lost 3.3 per cent. Petrol station giant Ampol lost 2.6 per cent after posting a 68 per cent fall in net profit.

The miners also declined, with Rio Tinto losing 3 per cent, BHP falling 1.1 per cent and Fortescue giving up 0.8 per cent after iron ore prices retreated over the weekend.

Shares in Perpetual lost 2.3 per cent after the investment manager announced it had rejected private equity fund KKR’s bid for its corporate trust and wealth units.

Online retailer Kogan fell 2.2 per cent after posting its half-year results, in which it revealed a 19 per cent rise in net profit. Fashion jewellery chain Lovisa slid 3.8 per cent after unveiling a 10 per cent rise in earnings, which fell short of market expectations.

In industrials, Reece plunged 13.2 per cent to a more than one-year low after the plumbing products company said its sales were down 3 per cent to $4.4 billion in the December half.

The lowdown

Capital.com analyst Kyle Rodda said that the local market continued to look jittery against a backdrop of global trade uncertainty, upside inflation risks and an earnings season that was providing little justification for buying into equities at current prices.

The ASX also found little support from Wall Street, where US stocks fell sharply on Friday after reports suggested worries among consumers and businesses about President Donald Trump’s policies may be hitting the US economy.

The S&P500 sank 1.7 per cent for its worst day in two months. The Dow Jones dropped 748 points, or 1.7 per cent, and the Nasdaq composite tumbled 2.2 per cent.

The losses accelerated through the day following several weaker-than-expected reports on the US economy. One suggested business activity is close to stalling, with growth slowing to a 17-month low. The preliminary report from S&P Global said activity unexpectedly shrank for US services businesses, and many in the survey reported slumping optimism because of worries about Washington.

“Companies report widespread concerns about the impact of federal government policies, ranging from spending cuts to tariffs and geopolitical developments,” said Chris Williamson, chief business economist at S&P Global Market Intelligence.

A separate report said US consumers are also preparing for higher inflation, in part because of potential tariffs that could raise prices for all kinds of imports. They’re broadly expecting prices to be 4.3 per cent higher 12 months from now, which is a big jump from their forecast of 3.3 per cent inflation last month, according to a survey by the University of Michigan. That fits with preliminary data in the survey this month.

Among US households, a divide is evident underneath the surface. Expectations for inflation are rising for political independents and Democrats while falling slightly for Republicans.

Within the big companies of the S&P 500 index, three out of every four stocks fell. Everything from big tech stocks that have been bid up amid the artificial-intelligence frenzy to airlines to metals companies dropped. Nvidia sank 4.1 per cent. United Airlines lost 6.4 per cent and Newmont Mining fell 5.7 per cent.

With AP and AAP

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