ASX 200 falls after Wall Street's tech selloff; Fortescue's guidance miss; Macquarie's flat first quarter; ANZ sacks, suspends staff amid probe

Senate committee to grill PwC CEO Kevin Burrowes, former bosses again. Commodities sink despite China rate cut. Fortescue misses guidance. ANZ suspends, sacks staff as market manipulation probe continues. Macquarie's flat first quarter. 

A tech selloff in the US has resulted in Wall Street's worst session since 2022, with equity markets around the world to be impacted. Picture: Timothy A Clary/AFP

Welcome to the Trading Day blog for Thursday, July 25. The ASX 200 index closed down 1.3 per cent to 7861.20 points, with tech stocks the weakest. It followed Wall Street's tech-heavy Nasdaq and the S&P 500 indexes marking their worst sessions since 2022.

The Aussie dollar is trading near US65.42c at 5pm AEST.

Updates

4:53 pm July 25, 2024

ASX 200 dives 1.3pc to two-week low

David Rogers

Australia's share market dives to a two-week low amid heightened risk aversion and rising volatility in global markets as US mega-cap tech stocks dive after reports.

Commodity price falls and weak updates from Macquarie and Fortescue weigh.

In its worst day in six weeks the S&P/ASX 200 index ends down 102.5 points or 1.3 per cent at 7861.2 points with all sectors down.

Tech, consumer discretionary, energy, property, materials, utilities and healthcare underperform with Block down 6.7 per cent, Wesfarmers down 2.9 per cent, Santos down 3.2 per cent, Goodman down 3.1 per cent, Fortescue down 5.5 per cent, Origin down 1.5 per cent and CSL off 1.6 per cent. Macquarie dives 3.4 per cent.

Iron ore, gold, copper and crude oil prices drop about 1 per cent even as China surprises by pulling another monetary policy easing lever, cutting its 1-year medium term lending facility

Focus turns to US 2Q GDP data overnight.

3:55 pm July 25, 2024

Airport refuellers to strike next week

Robyn Ironside

After weeks of threats over a pay dispute, Ampol aircraft refuellers have announced they will walk off the job at Sydney Airport for six hours on Wednesday, July 31.

The industrial action will be staged over three two-hour stoppages, from 2am to 4am; 8.30am to 10.30am and 6pm to 8pm.

The Transport Workers Union said the strikes followed 14 meetings between the bargaining team and Ampol management, following a unanimous vote by refuellers in favour of protected industrial action.

"Members want locked-in job security, adequate industrial and work health and safety training, and fair and reasonable wage increases," said the TWU.

"(Flight) cancellations and delays could be widespread as Ampol services 16 international airlines including Qantas, Virgin, Jetstar, Air New Zealand, Delta and British Airways."

2:06 pm July 25, 2024

Senate committee calls on PwC figures to appear

David Ross

A coterie of figures linked to PwC Australia's response to the tax scandal will be called to give evidence to a parliamentary committee next week, including CEO Kevin Burrowes and former CEO Luke Sayers.

In addition, Former Telstra boss, and author of a review into PwC, Dr Ziggy Switkowski has also been called to appear before the Parliamentary Joint Committee on Corporations and Financial Services on August 2.

In a statement on Thursday the committee warned "discrepancies" in evidence given in past hearings needed to be corrected. This comes after it was revealed Mr Burrowes was paid almost $1.2m more than he previously told a Senate Committee.

Labor Senator Deb O'Neill said it was time for "PwC to stop its half-truths and obfuscation and tell the full story to the Australian people".

"While the past leaders of PwC such as Tom Seymour and Luke Sayers may consider the matter to be resolved, their actions warrant further scrutiny. They must be completely answerable to this Committee," she said. "Through PwC’s monetisation of confidential government information and deception of the ATO and the Foreign Investment Review Board, a culture of contempt for the Australian taxpayer has emerged."

1:43 pm July 25, 2024

Commodities sink despite China rate cut

David Rogers

Commodities sink across the board amid worry about China's growth outlook despite an unexpected cut in China's one-year loan rate by the PBoC on Thursday.

Spot gold falls 1.2 per cent to a two-week low of $US2368.21 an ounce.

LME copper falls as much as 2 per cent to a four-month low of $US8,927 a tonne in Shanghai, while zinc falls about 1.7 per cent.

Iron ore futures fall as much as much as 1.7 per cent to a four-month low near $US99.30 a tonne in Singapore before rebounding above $US100.

WTI crude oil futures fall 0.9 per cent to $US76.86 a barrel.

It comes amid renewed pessimism on China’s economic growth outlook after China's Third Plenum meeting of Communist Party officials last week failed to deliver the type of stimulus that would support metals demand.

Citi for one had predicted a significant boost that would lift copper prices.

China's PBoC unexpectedly cut its one-year loan rate by 20 basis points to 2.3 per cent on Thursday, the first cut in almost a year and the biggest since April 2020.

That follows its 10bps cut of the seven-day reserve repo rate on Monday.

1:38 pm July 25, 2024

Bellevue Gold stuns market with raise, downgrade

Bridget Carter

Bellevue Gold investors were caught off guard on Thursday when the gold miner came out with a capital raising worth up to $175m and a production forecast downgrade after repeated denials from the managing director that a cash call could be on the agenda.

Shareholders have been wondering for about a year as to whether Bellevue Gold will raise equity to fund its Bellevue Gold project that entered production in the fourth quarter of last year on time and on budget.

At Kalgoorlie’s Diggers and Dealers conference in August, managing director Darren Stralow said that the company had no plans to raise equity. He also insisted at the Macquarie Australia Conference in Sydney during May that an equity raise would not be on the cards.

But Thursday, the company announced it would raise $150m by way of a placement and up to $25m by way of a share purchase plan.

1:26 pm July 25, 2024 Highlight

Scyne sacking 90 after spending pullback

David Ross

Government consulting firm Scyne Advisory will sack 90 staff in response to the pullback in government spending on hired help.

The firm on Thursday told staff it would make almost 90 roles redundant, including 10 managing directors – the equivalent of partners in the firm.

Scyne Advisory is the former government consulting business of audit and consulting operation PwC Australia, which was split off in a $1 deal last year with Allegro Funds after revelations about the firm’s misuse of confidential tax information.

Full report here.

1:06 pm July 25, 2024

Aus Vintage taps marketing expert amid challenges

Valerina Changarathil

Under-pressure winemaker Australian Vintage this week appointed former McDonald's and Lion Nathan marketing expert Margaret Zabel to its board as it focuses on "navigating challenging industry conditions" and overcoming internal hiccups.

The small-cap group made the announcement after market close on Tuesday and shares are flat at 17c currently, down 53 per cent since January.

Australian Vintage's chief executive of five years, Craig Garvin, was sacked in May for "engaging in conduct that, in its view, displayed a lack of judgement and was inconsistent with the values of the company and the high standards expected of its Chief Executive Officer". Acting CEO Peter Perrin has been steering the group and saw major wine group Accolade walk away from takeover talks on May 27.

The McGuigan, Tempus Two and Nepenthe wine brands owner also bid farewell to chairman Richard Davis, who tendered his resignation on June 11, after 15 years with the group amid a board renewal and equity raising. John Davies is now interim chair.

“Margaret will add significant technical and leadership expertise," a board spokesperson noted. As previously communicated, Naseema Sparks has left the board and John Davies will leave on August 23, subject to ensuring that the requisite number of directors is maintained on the board. "The board is focused on navigating challenging industry conditions and capitalising on future opportunities to maximise shareholder value," the group told shareholders.

12:37 pm July 25, 2024

ASX 200 hits two-week low in broad selloff

David Rogers

Australia's share market remains weak after diving to a two-week low in a broad-based selloff so far Thursday after US mega-caps led sharp falls on Wall Street.

The S&P/ASX 200 is down 1 per cent at 7885.4 after hitting 7866.8 near midday.

All sectors except consumer staples are down with tech, property and consumer discretionary sectors notable underperformers and the heavyweight financials and materials sectors doing much of the damage.

Block dives 6.5 per cent, Goodman falls 2.8 per cent and Wesfarmers falls 2 per cent. Macquarie falls 3.5 per cent and Fortescue falls 4.3 per cent on disappointing updates. major banks are down 0.3-0.9 per cent.

Newmont gains 1.5 per cent after its production report.

The index is having its worst day in the past six weeks amid rising volatility and risk aversion in global markets. Important chart support at 7900 is under threat.

It comes after the S&P 500 fell 2.4 per cent in its worst day since December 2022.

Mag 7 dived 4.8 per cent, with Nvidia down 6.8 per cent, as Tesla plunged 12 per cent and Alphabet lost 5 per cent after their reports disappointed.

Focus turns to US 2Q GDP data on Thursday.

12:15 pm July 25, 2024

Rising unemployment to 'save' RBA from rate hikes: Morgans

David Rogers

Will the RBA need to hike again in the coming months?

Morgans Financial's highly-regarded chief economist Michael Knox thinks not.

The chance of another rate hike rises from about 30 per cent at the August board meeting to a peak of about 36 per cent at the November board meeting.

Economists at Citi, Deutsche Bank, Judo Bank, Morgan Stanley, Rabo and UBS expect at least one more rate hike by November after higher than expected inflation data and an increasingly hawkish guidance from the RBA in recent months.

But Mr Knox sees two reasons why the RBA is more likely to stay on hold.

First, based on his model explaining 89 per cent of monthly variation in the cash rate target since 1990, the recent increase in inflation is "not yet sufficient to generate the need for a rise in rates", Knox says.

Second, his model, which shows that the outlook for inflation became more sensitive as the unemployment rate hit 50-year lows around 4.5 per cent in recent years, indicates that it's "far more likely that unemployment will go up".

"We now have been enjoying unemployment at a low level not seen for many decades," Knox says. "Small rises or falls in unemployment at this low level have the major effect on future rises and falls in inflation."

"We think that rather than rates go up over the next year, it is far more likely that
unemployment will go up."

"This rise in unemployment will put downward pressure on future inflation and forestall the need for future rate hikes."

Knox sees the unemployment rate hitting 4.8 per cent by December and at least 5.0 per cent in 2025 versus 4.0 per cent in June.

He expects the RBA to start cutting rates in August 2025.

12:15 pm July 25, 2024 Highlight

So what caused that big CrowdStrike shutdown?

CrowdStrike, the cybersecurity company that upended computer systems across the world last week, has identified a quality-control flaw that led to outages for millions of Microsoft Windows users and how it got onto its systems.

In an incident report published overnight, the company said a bug in a quality-control tool it uses to check system updates for mistakes allowed a critical flaw to be pushed to users’ machines.

That errant software update caused worldwide disruption on Friday last week, leading to tens of thousands of flights being delayed or cancelled, and paralysing operations at businesses and organisations from financial institutions and government agencies to medical centres and school districts.

The botched upgrade from the Texas-based cybersecurity firm has likely cost businesses billions of dollars globally, with estimates in NSW alone topping $200m, after big banks, hospitals, retailers and airlines were faced with what is known as “the blue screen of death”.


CrowdStrike’s stock has plunged in the days since. Chief executive George Kurtz, who has apologised for the incident, has been summoned to testify before lawmakers. CrowdStrike in the report said it now plans to do more testing of the type of update that caused the crashes before sending them out. The company also plans to gradually roll out updates to larger groups of users—known as a "canary deployment"—so it can check for problems.

– The Wall Street Journal