The Wrap: Tech and miners drag shaky ASX 1.1 per cent lower

Welcome to your five-minute recap of the trading day and how the experts saw it.

The numbers: The Australian sharemarket was dragged down by miners and tech on Monday, dropping 75.8 points to 6602.2 and wiping 1.1 per cent off the benchmark index. Last week saw a 2.1 per cent rise.

The tech sector lost 2.3 per cent and materials tumbled 2.5 per cent following a fall in iron ore futures. BHP closed down 3.1 per cent to $38.00, Rio Tinto dipped 2.1 per cent to $95.36 and Fortescue lost 2.6 per cent to $16.85.

Nine out of 11 sectors closed lower. Financials resisted the plunge earlier in the day but eventually fell 0.5 per cent into the red as NAB dropped 1.21 per cent, ANZ dropped 0.5 per cent and the other two major banks stayed flat.

A surprisingly strong jobs report showed that employers are continuing to hire despite worries about a possible recession.Credit: Bloomberg

The Aussie dollar is buying US68.8 cents. The Commonwealth Bank has warned it could sink as low as US65 cents by the end of the year.

EML Payment plummeted almost 25 per cent in reaction to news the company’s chief executive of 10 years, Tom Cregan, was stepping down. Fruit grower Costa wiped off 8 per cent after it halted trading today and reported disease-affected naval oranges would affect its outlook this year.

The lifters: New Hope 4.7%, Imugene 2.2%, Suncorp 1.8%

The laggards: EML Payments -24.6%, Novonix -11.4%, Pointsbet -9.5%

The lowdown: The sharemarket had a sluggish start on Monday and by close had wiped off more than half of last week’s 2.1 per cent gain.

The local market’s fall followed a choppy day of trading on Wall Street on Friday as a stronger-than-expected report on the US jobs market showed unemployment held at 3.6 per cent. But investors are apprehensive about another report on inflation slated for release on Wednesday.

The market wobbles were due to investors mulling “big questions” surrounding inflation, interest rates and the probability of recession, said JP Morgan global market strategist Kerry Craig.

“Not all the data is pointing in the same direction which adds to the uncertainty,” Craig said. “Unfortunately this isn’t likely to change any time soon, or at least until there is clarity around whether inflation has peaked in the US and how policymakers will respond.

“Beyond the near term inflation and earnings outlook, investors will have to contend not just with the question of whether there will be a recession but what that recession may look like.”

Craig said there could be a “less painful” correction than was experienced during the onset of COVID-19 or the GFC.

“That could create a lot of opportunity for investors in the long run given how far equities have sold off,” he said.

Tweet of the day:

Quote of the day: “Recession talk cannot seriously be applied to Australia. Westpac continues to forecast Australia’s economy to grow 4 per cent over 2022, led by consumer spending pent-up from Covid lockdowns into early 2022,” said senior currency strategist at Westpac Sean Callow.

You may have missed: Market operator ASX Ltd is continuing its executive shake-up as chief financial officer Gillian Larkins said she would depart by August. The news follows the retirement of chief executive Dominic Stevens. He’ll be replaced by senior executive Helen Lofthouse in August.

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