ASX dips after losses on Wall Street; Perpetual hit by outflows

Welcome to your five-minute recap of the trading day.

The numbers

The Australian sharemarket pared back almost all of its losses to end the session flat on Wednesday after a dip on Wall Street, where the corporate earnings season ramped up.

The S&P/ASX 200 slipped 7.4 points, or 0.1 per cent, to 7963.7 at the close. Eight out of the 11 industry sectors finished lower, with property trusts and energy the worst hit. The energy sector lost 1.1 per cent as oil fell for a fourth consecutive session to $US77 a barrel, its longest losing streak since June.

Wall Street is bracing for an earnings deluge.Credit: Bloomberg

The lifters

Miners (up 0.4 per cent) helped to pare back losses on the local bourse with gold miners Evolution (up 4.1 per cent) and Northern Star (up 2.4 per cent) among the biggest large-cap advancers and iron ore heavyweights BHP (up 0.2 per cent), Fortescue (up 0.5 per cent) and Rio Tinto (up 0.5 per cent) all finishing higher.

Two of the four big banks traded higher, including Westpac, which climbed 0.7 per cent and NAB which gained 0.6 per cent. Boutique investment firm GQG Partners (up 4.8 per cent) was the best-performing large-cap stock, while Pro Medicus (up 2.8 per cent) and Netwealth Group (up 2.6 per cent) also rose.

The laggards

Energy heavyweights Woodside (down 1.1 per cent), Santos (down 0.8 per cent), Ampol (down 1.3 per cent) and Whitehaven Coal (down 1.4 per cent) all retreated.

Telix Pharmaceuticals was the worst-performing large-cap stock on the local bourse, falling 7.2 per cent after abandoning plans at the eleventh hour to list on the Nasdaq, followed by Flight Centre (down 4.7 per cent) and Mineral Resources (down 3.2 per cent).

Funds manager Perpetual slipped 0.7 per cent after its assets under management fell $12.4 billion in the fourth quarter to $215 billion. Chief executive Rob Adams blamed negative market movements, distributions of $1.4 billion, currency movements of $2.1 billion and net outflows of $8.9 billion.

The lowdown

Capital.com senior financial market analyst Kyle Rodda said mixed earnings from tech companies weighed on risk appetite in markets on Wednesday.

“It would appear the weak tech results began to weigh on stocks in Asia later in the session,” he said. “Ultimately, we are entering a rough seasonal period, which is being compounded by the typical risk-aversion heading into a US election; this is offsetting the tailwinds of solid earnings and rate cut expectations and driving this pullback from what were modestly overbought levels.”

On Wall Street overnight, the S&P 500 slipped 0.2 per cent. The Dow Jones edged down by 0.1 per cent and the Nasdaq composite dipped 0.1 per cent.

Tesla reported its lowest profit margin in more than five years after Wall Street’s closing bell, missing Wall Street earnings targets yet again as the electric vehicle maker cut prices to revive demand while it increased spending on AI projects. Its shares were 4 per cent lower in after-hours trade.

Google parent Alphabet reported second-quarter revenue above analysts’ expectations, boosted by demand for cloud-computing services and advertising on its search engine. Its shares were 1.1 per cent lower in after-hours trading. Alphabet’s revenue for the April–June period climbed 14 per cent from the same time last year to $US84.74 billion ($128.1 billion).

The smaller stocks in the Russell 2000 continued their big run and rose 1 per cent. They’ve flipped the market’s leaderboard recently and zoomed higher amid hopes for coming cuts to interest rates.

UPS was one of the heaviest weights on the S&P 500 and tumbled 12.1 per cent after delivering weaker profit and revenue for the northern hemisphere spring than analysts expected.

But chief executive Carol Tomé said the company’s US business delivered more packages than a year earlier, its first such growth in nine quarters, and called it a “significant turning point for our company”.

Nvidia was the stock that weighed the most on the S&P 500. Its loss of 0.8 per cent for the day was relatively modest, but the S&P 500 gives more weight to bigger stocks, and Nvidia is worth more than $US3 trillion.

With inflation slowing, the wide expectation on Wall Street is for the Federal Reserve to begin lowering its main interest rate in September.

Treasury yields have sunk over recent months on such expectations, and they remain below their heights reached in April. The yield on the 10-year Treasury held steady at 4.25 per cent, where it was in late Monday trading.

Tweet of the day

Quote of the day

“As we see more and more activity in the private market, the question I’ve got for myself and ASIC is ‘what’s going on here?’,” ASIC chair Joseph Longo said at a Bloomberg event in Sydney on Wednesday, as he explained why the corporate regulator is probing the private credit market.

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With AP

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