Australian sharemarket dips amid September post-reporting season ‘cooling off period’

The ASX retreated after notching up a major milestone yesterday, with September usually a post-reporting season ‘cooling off period’.

The Australian sharemarket started spring in the red despite better-than-expected figures showing the economy grew by 0.7 per cent in the June quarter — but that was before the Delta outbreak dramatically worsened.

After capping off 11 straight months of gains yesterday, the S&P/ASX200 closed 0.1 per cent lower at 7527.1 while the All Ordinaries Index dipped 0.13 per cent to 7813.

CommSec analyst Steven Daghlian noted it was the first decline this week but followed a negative lead from Wall Street.

“A solid profit reporting season is now behind us, as is the longest and best monthly winning streak we’ve had here on the Aussie market in 78 years,” Mr Daghlian said.

“With the exception of mining and energy companies last month, all other sectors managed to improve quite strongly.”

Energy stocks, however, shook off a 1 per cent fall in the oil price overnight.

Beach gained 2.86 per cent to $1.08, Woodside lifted 1.28 per cent to $19.74, Santos rose 1.49 per cent to $6.14 and Origin firmed 0.23 per cent to $4.46.

Mining billionaire Andrew Forrest can’t keep out of the headlines, from Tasmanian salmon to Canadian nickel. Picture: Keryn Stevens

Miners that performed well included gold producers Evolution and Newcrest, respectively up 2.3 per cent at $4 and 1.54 per cent at $25.12, while copper-focused OZ Minerals appreciated 1.49 per cent to $23.92.

But after the iron ore price eased, Rio Tinto weakened 2.38 per cent to $109.39, BHP slipped 1.27 per cent to $45.03 and Fortescue dropped 3.19 per cent to $20.33.

BHP threw down the gauntlet to Andrew “Twiggy” Forrest’s Wyloo Metals in the bid for Canadian nickel company Noront Resources.

Wyloo said on Tuesday its offer had “a higher certainty of success” given it owned a big stake in Noront and did not intend to support BHP’s offer.

But BHP said Wyloo’s proposal was uncertain, conditional and non-formal, while the mining giant’s offer was “the only transaction currently available”.

“Wyloo’s support is not required in order for BHP’s offer to be successful, and we remain confident,” BHP chief development officer Johan van Jaarsveld said.

Metcash, which is the wholesaler behind IGA supermarkets, Mitre 10 hardware stores and others, told its annual general meeting that trading continued to be strong over the first 16 weeks of this financial year thanks to consumers continuing to shop locally, eat and drink at home, and renovate their properties.

Liquor sales were 9.5 per cent higher and hardware sales jumped 16.3 per cent compared with the same period last year, but supermarket sales were 1.8 per cent lower on the same basis.

People are drinking a lot at home, Metcash figures suggest. Pictured is Rozelle Cellarbrations owner Danielle Richardson. Picture: Sam Ruttyn

Metcash shares slipped 2.45 per cent to $3.98.

Vitamins giant Blackmores pulled back from its recent strong run, giving up 6.66 per cent to $93.15.

“Blackmores copped a heavy price correction today, losing more than seven per cent at one point,” OMG chief executive Ivan Tchourilov said.

“Their revenue has been reliant on the Chinese market recently, while they’ve struggled to make ground in Australia.

“News the Delta variant is throwing the Chinese economy off course is unlikely to supplement their bottom line, a story you’ve heard so many times before.”

Mr Tchourilov said travel stocks continued climbing higher, with growing vaccination rates making investors bullish on expectations travel would take off again before the end of the year.

Qantas gained 3.14 per cent to $5.25, Flight Centre rose 2.99 per cent to $16.90 and Webjet firmed 0.88 per cent to $5.74.

Micro-investing app Raiz raised eyebrows after boss George Lucas used his powers as a substantial shareholder to request the removal of three directors, Mr Tchourilov said.

“While the material impact is yet to be known, the in-house spat caused investors to lose confidence,” he said.

“Investors and gossipers alike will be waiting anxiously to hear more at the meeting of shareholders.”

Wow. Raiz chief executive George Lucas is trying to throw out three of the company’s directors.

Raiz shares sank 13.13 per cent to $1.72.

Another poor performer was Flinders Mines, which plunged 11.36 per cent to 78 cents for no obvious reason.

The banks were standouts, with ANZ firming 0.47 per cent to $27.98, Commonwealth Bank improving 0.88 per cent to $101, National Australia Bank advancing 2.2 per cent to $28.34 and Westpac adding 1.12 per cent to $26.11.

Mr Tchourilov warned September had historically been a cooling-off period for stock exchanges in the wake of reporting season.

“The trend applies to this year especially, with investors looking past the record results that were announced and towards an economy rife with headwinds, in no small part thanks to the spread of the Delta variant,” he said.

“Analysts will be double checking results and portfolios will be rebalanced before heading into the Christmas/New Year period.

“Second quarter GDP growth outperformed the estimates ... we’ve avoided a technical recession.

“Keep in mind lockdowns only came into effect at the end of June – the third quarter will most definitely be a different story.”

The Aussie dollar was fetching 73.37 US cents, 53.32 British pence and 62.13 Euro cents in afternoon trade.

Originally published as Australian sharemarket dips amid September post-reporting season ‘cooling off period’