ASX closes lower as bank, real estate and consumer stocks fall
Welcome to your 5-minute recap of the trading day.
The numbers
A brighter outlook for the mining sector failed to make up for falls to banks and consumer stocks as the Australian sharemarket closed lower on Friday despite Wall Street adding to recent milestones and hitting an all-time high.
The S&P/ASX 200 fell 12.40 points, or 0.14 per cent to 8576.80, with 10 of 11 industry sectors in the red. The Australian dollar is buying about US65.83¢.
The ASX 200 is expected to climb again on Friday, building on Thursday’s gains.Credit: Louise Kennerley
The lifters
Lynas Rare Earths and Iluka Resources rocketed 16.6 per cent and 22.8 per cent respectively after US-based MP Materials secured a $400 million equity investment from the US Department of Defence to build a new magnet plant and expand rare earth capabilities.
Construction materials company Johns Lyng Group jumped 22.6 per cent after announcing it had agreed to a billion-dollar takeover deal from Pacific Equity Partners. JLG’s chairman Peter Nash said the takeover would give shareholders “the opportunity to receive cash at a material premium”.
The materials sector benefited from higher iron ore prices, increasing 1.8 per cent. The sector was led by BHP ended the day up 2.7 per cent, Fortescue rose 2.9 per cent and Rio Tinto climbed 2.3 per cent.
The laggards
The Real Estate sector weighed on the local bourse, slipping by 1.5 per cent. Goodman Group, Scentre and Stockland all slid – 1.8 per cent, 1.3 per cent and 1.5 per cent respectively – shedding gains from Thursday and ending the week in the red following the Reserve Bank’s surprise decision to hold interest rates steady.
Consumer discretionary stocks dipped by 0.7 per cent. Wesfarmers ended the day down 0.7 per cent and JB Hi-Fi fell 2.1 per cent.
JB Hi-Fi was among the consumer discretionary stocks which declined on Friday.Credit: Jacky Ghossein
Financials – driven by a 0.5 per cent decline for Commonwealth Bank, the index’s largest stock – fell 0.5 per cent. National Australia Bank and Westpac were down 0.3 per cent and 0.2 per cent respectively, joining CBA in the red. ANZ gained 0.1 per cent and Macquarie declined 1.5 per cent.
The lowdown
Iron ore headed for a third weekly gain, potentially the best run since January, on speculation Beijing may do more to aid the struggling property sector, while also moving to tackle industrial overcapacity.
Futures rose toward US$100 a ton, after closing on Thursday (US time) at the highest since May. Miners BHP, Fortescue and Rio Tinto rose as a result
Trucks travelling along an access road at Rio Tinto’s Gudai-Darri iron ore mine in the Pilbara, WA. Credit: Bloomberg
China’s government has shown fresh determination recently to eradicate industrial overcapacity, including in the nation’s steel industry, the world’s largest. While that drive may prompt lower steel production — potentially eroding iron ore demand — it stands to benefit mills’ profitability, lifting prices of the alloy, as well as supporting raw materials.
Iron ore is coming off the back of five straight monthly losses, a run that was driven by signs of abundant supplies from leading miners in Australia and Brazil, as well as efforts by the authorities in China to push mills to make less steel. The Asian country is the world’s largest iron ore importer, and its appetite for cargoes shapes the tenor and direction of the market.
Prime Minister Anthony Albanese confirmed on Friday that representatives of BHP, Rio Tinto and Fortescue will travel as part of his delegation to China, Australia’s biggest trading partner, this weekend.
Prime Minister Anthony Albanese taking questions on Friday. Credit: Dominic Lorrimer
On Wall Street the S&P 500 rose 0.3 per cent, inching past the record it set last week after a better-than-expected June jobs report. The Nasdaq composite edged up 0.1 per cent, enough of a gain to notch a new high for the second day in a row. The Dow Jones Industrial Average finished 0.4 per cent higher.
Shares of WK Kellogg, a maker of cereals including Froot Loops, Special K and Corn Flakes, vaulted 30.6 per cent after Italian candy maker and maker of Nutella, Ferrero, agreed to acquire Kellogg in a deal valued at roughly $US3.1 billion ($4.7 billion). The transaction includes the manufacturing, marketing and distribution of WK Kellogg Co.’s portfolio of breakfast cereals across the US, Canada and the Caribbean.
The market has been steadying following a downbeat start to the week as the Trump administration renewed its push to use threats of higher tariffs on goods imported into the US in the hopes of securing new trade agreements with countries around the globe.
Wall Street analysts predict that companies in the S&P 500 will deliver 5 per cent growth in second-quarter earnings, according to FactSet. That would mark the lowest rate since the fourth quarter of 2023.
With AP, Bloomberg
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