ASX200 falls away from record high as Woolworths, Coles retreat

The Australian sharemarket tumbled on Monday as supermarket giants Coles and Woolworths retreated on the ACCC’s bombshell legal move.

The local sharemarket pulled back from record highs on Monday, with sharp falls in staples and discretionary stocks propelling the market into the red.

The benchmark ASX200 tumbled 56.6 points, or 0.69 per cent, to 8152.9 points, while the broader All Ordinaries index fell 53 points, or 0.63 per cent, to 8384.2.

Tech stocks lifted 0.14 per cent to 3403.3

The slump was broadbased, with eight out of 11 industry sectors losing value, led by staples with a 2.8 per cent plunge.

The ACCC likely triggered the sector’s sell-off after announcing it had started legal proceedings against Coles and Woolworths, alleging the supermarket behemoths had misled customers around discount pricing claims on hundreds of common products.

Woolworths slumped 3.4 per cent to $33.79 a share, while Coles fell 3.28 per cent to $18.59.

Discretionary stocks were also hit, with Super Retail Group sliding 2.24 per cent to $17.90, Harvey Norman losing 2.22 per cent to $4.85 and JB Hi-Fi shedding 2.04 per cent to $78.25. Monday’s tumble snapped a cracking bull run from last week, with the bourse notching fresh highs day after day on the back of the expectation and then delivery of an outsized 50 basis point rate cut from the US Federal Reserve.

On Friday, the market closed at a record high of 8209.5 points.

Steep falls in retail giants Woolworths and Coles pushed the market lower on Monday. Picture: Newswire / Nicki Connolly

Monday’s fall also followed a subdued session on Wall St overnight on Friday.

The Dow Jones lifted 38 points, or 0.09 per cent, to settle at 42,063, while the S and P 500 index lost 0.19 per cent to 5702 and the tech-heavy Nasdaq fell 0.36 per cent to 17,948.

The Reserve Bank of Australia has kicked off a two-day Board meeting, with a decision on interest rates due on Tuesday.

“The main message on this Tuesday’s rate call is that a cut is looking about as unlikely as a hike,” eToro market analyst Sam North said.

“The US Fed’s 50 bps cut call last week has added to the mounting pressure on the RBA to produce a stronger indication of when a cut may finally arrive, but stronger-than-expected unemployment figures last week have almost certainly pushed rate relief for Australians into next year.

“RBA Governor Michele Bullock’s rhetoric has remained mostly hawkish and her recent comments that homeowners may have to accept that they will have to sell their homes – the largest and most valuable asset for many Australians – in order to stay afloat seemed to infer that the central bank is not eager to rush any kind of cut they would deem premature.”

The ASX200 lost 0.69 per cent on Monday. Picture: NewsWire / Christian Gilles

Uranium stocks soared after tech giant Microsoft expressed interest in nuclear power fuelling its data centres.

Boss Energy jumped 8.21 per cent to $2.90, making it the benchmark’s top performer, while Paladin Energy leapt 4.67 per cent to $9.86 and Deep Yellow climbed 5.13 per cent to $1.23.

But the big miners were mixed as Singapore iron ore futures slipped 1.5 per cent to $90.30 a tonne.

BHP fell 1.31 per cent to $39.81, Rio Tinto slipped 0.6 per cent to $112.34 and Fortescue edged up 0.34 per cent to $17.69.

In corporate news, Healius confirmed the sale of its Lumus Imaging business to Affinity Equity Partners for an enterprise value of $965m.

“The sale of Lumus is a positive outcome for Healius shareholders, our staff, patients and referrers,” Healius CEO Paul Anderson said.

“The sale will provide Healius with both the resources and time to continue to improve our Pathology operations and the scope to return cash to shareholders.”

Stock in the company jumped 7.45 per cent to $1.73.

The largest laggard was Webjet Limited, which tumbled 10.6 per cent to $7.35.

The Aussie dollar gained 0.24 per cent to buy US68.2c at the closing bell.

Originally published as ASX200 falls away from record high as Woolworths, Coles retreat