ASX falls after ‘inexplicable’ rally during Tuesday’s trading

The ASX closed down on Wednesday as investors took advantage to take a profit following a record day of trading on Tuesday.

The ASX 200 broadly traded lower as investors profit take from strong trading during the prior session. Picture: NewsWire / Max Mason-Hubers

The Australian sharemarket fell during Wednesday’s trading as investors looked to take profits following a stellar day trading yesterday.

The benchmark ASX 200 index fell 47.70 points or 0.57 per cent to close out Wednesday’s trading at 8326.30 points.

The broader All Ordinaries fell by 50.10 points or 0.58 per cent to finish trading at 8579.10.

The Australian dollar traded slightly lower, down 0.1 per cent to 65.25 US cents.

The ASX 200 broadly trades lower as investors profit take from strong trading during the prior session. Picture: NewsWire / Max Mason-Hubers

Australia’s market weakness came despite strong figures out of Wall Street, with the tech heavy Nasdaq popping 1.04 per cent to finish at 18,987.47, while the S&P 500 gained 0.4 per cent to end at 5,916.98.

The Dow Jones Industrial Average dipped 120.66 points, or 0.28 per cent, to settle at 43,268.94.

Shares in the US jumped as investors tried to get in front of the news on Nvidia, with the AI giant set to announce its results after the markets close on Wednesday in the US.

On the Australian market eight of the 11 sectors traded lower, with utilities outperforming, gaining 0.67 per cent to grow 6.56 per cent over the past five days.

Capital.com senior financial market analyst Kyle Rodda said Wednesday’s fall came as traders took profits from an unexpectedly strong day on Tuesday.

“The ASX200 pulled back from record highs, in a move that was as inexplicable as the rally that preceded it,” Mr Rodda said.

“The sell-off looked little more than traders taking profits off the table after being gifted an all time high for the market the day before.”

One notable bright spot was Commonwealth Bank which continued to set new record highs.

The nation’s largest lender rose by 0.43 per cent or 0.28 per cent to $156.04 on Wednesday to close above the record high at $155.61 that it set the day prior.

The other big four banks all fell with Westpac being the worst of the lot, down nearly 1.05 per cent to $33.04, followed by NAB, down 0.66 per cent to $39.28, and ANZ is 0.59 per cent lower at $32.15.

CBA closes in on a record high for the second day in a row. Picture: NewsWire / Max Mason-Hubers

“The significance of CBA closing at a record high is how richly valued the stock is, especially given the weaker fundamentals domestically.

“It is a milestone and it is beneficial for investors, but there are those natural considerations around whether this is a fair price to pay for the stock or if it’s time to trim that exposure.”

Tabcorp was the strongest performing share on the ASX up $0.015 or 2.77 per cent to close out the day at $0.55, while the gold miners continue their recovery off the back of stronger underlying fundamentals.

“The gold price extended its recovery after a further drop in the US Dollar and an escalation in the war between Ukraine and Russia after the Ukrainians fired their first round of US-made missiles into Russian territory,” Mr Rodda said.

Meanwhile Neuren Pharmaceuticals was the worst performing share, down 7.5 per cent or $1.10 to $13.69.

The weakness in share prices also hit New Hope Corporation Karoon Energy, Brambles and NetWealth which all fell more than 3 per cent during Wednesday’s trading.

Originally published as ASX falls after ‘inexplicable’ rally during Tuesday’s trading