Australian sharemarket pulls back as certain stocks move inexplicably strongly

The ASX lost momentum after its recent record-breaking run, racking up a second straight day of losses, with some strong share price moves seemingly inexplicable.

The Australian sharemarket pulled back for the second straight day, with all sectors except mining and energy losing ground in a “directionless” trading session.

The S&P/ASX200 closed 19 points or 0.27 per cent lower at 7142.6 while the All Ordinaries Index dipped 14.6 points or 0.2 per cent to 7392.1.

CommSec analyst James Tao said it was a soft start to the month for the local bourse and there was no overnight lead from Wall Street, which was closed for a public holiday.

“So that’s certainly not helping the directionless moves,” Mr Tao said.

Banks weighed on the market, with ANZ dropping 1.39 per cent to $28.31 after announcing a $1bn capital raising, Commonwealth Bank easing 0.26 per cent to $99.46, National Australia Bank giving up 0.82 per cent to $26.37 and Westpac shedding 0.83 per cent to $26.20.

ANZ announced a $1bn capital raising. Picture: David Clark

Bank of Queensland retreated 1 per cent to $8.86 while Bendigo and Adelaide Bank softened 0.87 per cent to $10.26.

Other notable losses among the big names included Telstra, down 1.14 per cent at $3.48, and biotech behemoth CSL, which lost 0.77 per cent to $287.99.

Bega Cheese, which rose 3.46 per cent on Monday, erased 3.85 per cent to $5.75.

Vitamins giant Blackmores fell almost 5 per cent to $67.37 and miner Lynas Rare Earths declined 4.89 per cent to $5.25 — both for no obvious reason.

Another seemingly inexplicable move was infant formula maker Bubs Australia, which soared 22.39 per cent to 41 cents.

“No particular news coming out from the company itself,” Mr Tao noted.

Bell Potter has a “hold” recommendation on Bubs, with a price target of 54 cents.

Bubs shares shot up more than 22 per cent and the reason is not clear. Picture: Peter Hemphill

OMG chief executive Ivan Tchourilov observed Australian betting technology business BetMakers was down again after making a $4bn play for Tabcorp’s wagering and media business.

“BetMakers are on their way to becoming a true global player in the gaming and wagering industry, so this is a significant move for them, and it’ll be interesting to see if they can pull it off,” Mr Tchourilov said.

BetMakers shares slid 5.15 per cent to $1.10 while Tabcorp backtracked 0.59 per cent to $5.08.

Rio Tinto firmed 0.7 per cent to $124.60, BHP inched 0.13 per cent higher to $47.91 and Fortescue lifted 1.74 per cent to $22.82.

“We saw the price of iron ore overnight lifting close to 6 per cent and again heading back towards that $US200 a tonne mark having fallen well below those particular levels of late,” Mr Tao said.

While the materials sector was a rare bright spot, some gold miners retreated.

Silver Lake Resources lost 3.73 per cent to $1.93, Resolute Mining dropped 1.64 per cent to 60 cents and Northern Star slid 1.2 per cent to $11.56 but Australia’s biggest producer of the precious metal, Newcrest, put on 0.11 per cent to $28.35.

In the energy sector, Oil Search rose 1.65 per cent to $3.70, Origin firmed 0.5 per cent to $3.99, Santos added 2.07 per cent to $6.91 and Woodside Petroleum gained 1.38 per cent to $22.11.

The biggest Australian corporate news was Nine Entertainment signing deals with Google and Facebook. Picture: Robyn Beck/AFP

Mr Tao noted it was quiet on the company news front, with Nine Entertainment taking the headlines for becoming the latest media organisation to ink content sharing deals with Google and Facebook.

Shares in Nine put on 0.67 per cent to $2.99.

Economic news was plentiful, however, with the Reserve Bank of Australia keeping the cash rate on hold at a historic low of 0.1 per cent and reiterating it wouldn’t rise any time soon.

Meanwhile, CoreLogic’s national Home Value Index showed the nation’s housing boom continued unabated, with prices rising 2.2 per cent over May.

“We’ve got Australian GDP figures due out on Wednesday, which lots of traders and fund managers will be watching closely,” Mr Tchourilov said.

“Quarter-on-quarter growth is expected to contract, so any surprises on the upside may actually be a negative for equity markets as this may imply that the recovery is gaining steam faster than expected, which would likely lead to inflation fears.”

The Aussie dollar was buying 77.42 US cents, 54.39 British pence and 63.29 Euro cents in afternoon trade.

Originally published as Australian sharemarket pulls back as certain stocks move inexplicably strongly