ASX 200 falls on energy stocks as slowdown fears put damper to year’s end

Energy stocks lead broad falls across the sharemarket as it recorded its lowest close since November as the threat of a slowdown dampens sentiment.

The Australian sharemarket fell to its lowest close in seven weeks as the threat of a global slowdown in 2023 weighed on the minds of investors in the second last session of the year.

The S&P/ASX 200 index lost 0.9 per cent, or 66.30 points to 7020.10 — which was surpassed last week’s low of 7024.30 to be the worst close since 6964.00 on November 11.

The defensive health care sector was the only sector to rise as energy lead the other 10 index sectors into red as China’s surge in Covid-19 cases and deaths hit crude oil prices

Losses were spread across Asia with Tokyo’s Nikkei 225 and the Hang Seng in Hong Kong both down by 1 per cent.

With the end of the month, quarter and year approaching, some investors are also used this time to rebalance their portfolios ahead of 2023.

Global players were “leaning into a defensive posture as investors contemplate the implications of Russia’s new oil ban and China’s reopening,” Stephen Innes of SPI Asset Management wrote in a note.

Investors had also been concerned that China’s decision to reopen could add fuel to the inflation fire and push interest rates higher. Overnight moves by the US and Italy to slap new restrictions on arrivals from China have added to the uncertainty.

A pullback in global crude prices overnight amid a surge in China’s Covid-19 cases saw oil stocks give up strong gains from the previous session as Woodside Energy dropped 4.5 per cent to $35.14, Santos fell 3.9 per cent and Beach Energy declined 2.8 per cent.

Energy, the worst performing sector, was weighed down by Whitehaven Coal, which slid 4.9 per cent — taking total losses in the past two days to past 13 per cent. Shares in Bowen Coking Coal gained 8.3 per cent to 33c after the completion of loading its first coal train through its Mallawa train loadout facility following refurbishment works.

The tightening of borders on Chinese tourists from places including the US, Japan and Italy weighed on the travel sector as Prime Minister Anthony Albanese refused to rule similar measures if circumstances changed. Shares in Qantas fell 2.3 per cent to $5.94, Flight Centre lost 2.8 per cent and Webjet dropped 1.4 per cent.

Singapore iron ore futures consolidated recent gains to rise slightly to $US114 per tonne — its highest since early August. The iron ore miners were however down amid the uncertainty out of China. BHP fell 1.6 per cent, Fortescue Metals slid 0.8 per cent and Rio Tinto dipped 0.6 per cent.

Some lithium stocks bucked the trend as Sayona Mining surged 5.9 per cent to 18c despite not releasing any news, while Lake Resources and Liontown Resources gained nearly 3 per cent.

Star Entertainment disclosed that chief executive Robbie Cooke was issued $3.2m worth of performance shares late last week following shareholder approval at the casino operator’s annual meeting in November. The embattled group was down 1.9 per cent to a fresh 34-month low of $1.79.

Financials held up compared to broader losses across the index as ANZ slid 0.4 per cent, Commonwealth Bank dropped 1 per cent, NAB fell 1 per cent and Westpac declined 0.9 per cent.

Health was the only sector to rise as CSL gained 0.1 per cent.

The dollar was near US67.40c at the close.

Additional reporting AFP