ASX falls flat in tepid session; Mining, tech stocks lead losses

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

The numbers

The Australian sharemarket has closed slightly lower on Thursday in a downbeat session, with investors shunning heavyweight iron ore miners and tech stocks.

In a mixed session, the local index started the day weaker, but was brought back to life by financial and healthcare stocks, most notably CBA and CSL.

However, the index lost most of the momentum by the end of the day to close 9.70 points, or 0.1 per cent, weaker at 8206.30 points. The Australian dollar strengthened across the day. It was 0.2 per cent higher at US66.44¢ at 4.27pm AEDT.

The Australian sharemarket was in positive territory at lunchtime on Thursday. Credit: Dominic Lorrimer

The lifters

Healthcare was the top-performing sector of the day, up 0.7 per cent, with Australia’s largest health company, CSL recording a 0.8 per cent gain. A 1.2 per cent increase from CBA helped lift the financial sector, which increased by 0.7 per cent, as well as gains by ANZ (1.1 per cent) and NAB (0.7 per cent).

One of the biggest winners on Thursday was Adairs, which saw its stock jump 11.6 per cent. The homewares retailer said sales surged more than 16 per cent in the eight weeks to October 20, helped by a new warehouse management system and a successful product range.

Woolworths and Coles rose for a second day, adding 0.5 per cent and 1 per cent, respectively. The supermarket giants announced this week they will fight allegations they tricked customers with fake discounts, claiming the competition watchdog’s cases against them are misconceived.

The laggards

The materials sector was among the biggest losers, down 1 per cent, as iron ore heavyweights BHP and Rio Tinto fell 0.4 per cent and 0.6 per cent, respectively.

Fortescue Metals Group declined by 3.2 per cent after the Twiggy Forrest-controlled miner said it shipped 47.4 million tonnes of iron ore in the September quarter. While that was a first-quarter record, its 4 per cent growth in shipments was down from 10 per cent in the June quarter.

The information technology sector slumped 2.9 per cent, following losses by the Big Tech giants on Wall Street. Locally, they were led lower by WiseTech (down 6.3 per cent), Next DC (down 3.9 per cent) and Xero (down 0.6 per cent). WiseTech’s stock has been plunging all week after a string of damaging allegations about its billionaire founder Richard White, who has been accused of intimidation, bullying and overseeing poor corporate governance. After the market close, WiseTech announced his resignation with immediate effect, saying he would come back as a consultant after a short period of leave.

Gold miner Newmont slumped 6.3 per cent after reporting quarterly earnings that fell short of Wall Street’s expectations. Its US-listed shares plunged as much as 7.2 per cent in New York after the world’s top gold producer reported third-quarter results that missed analysts’ expectations for revenue and adjusted earnings, despite reporting its largest quarterly profit in five years.

Newmont is the first major gold miner to report results in an earnings season that’s expected to see bumper profits for bullion miners. The companies are cashing in on a soaring gold price that has hit repeated record highs this year while costs for mining the metal have eased.

Wall Street has retreated further from its record highs. Credit: AP

The lowdown

Market strategist at trading platform Moomoo Jessica Amir said the Australian sharemarket will continue to operate on shaky ground until there is election certainty in the US.

Amir said the market is vulnerable to a potentially big pullback, and Thursday’s flat outcome was aided by some better-than-expected company results in the US.

While AI giant Nvidia and other Big Tech stocks were among the heaviest weights on the US market overnight, Tesla soared 12 per cent after the close of trading after CEO Elon Musk said he expected vehicle sales to grow 20 to 30 per cent next year, reassuring investors the company was improving its core business of selling electric vehicles profitably.

Amir said the combination of three risk indicators – the rising volatility VIX index (also known as the “fear index”), spiking bond yields and fears over the uncertain Japanese market – could mean the Australian sharemarket could face a significant correction.

“For investors, if we do see that pullback, don’t be too concerned. We just have to remember that most investment managers actually buy stocks when the markets fall,” she said. “The Aussie sharemarket and the US sharemarket have always recovered from the crash. You just need to look for opportunities to buy the stocks you like before the market rebounds.”

Overnight on Wall Street, the benchmark S&P 500 fell 0.9 per cent for its first three-day losing streak since early September. It was coming off two small losses since setting an all-time high on Friday, and the decline follows a superb run where the index had rallied to six straight winning weeks, its longest such streak of the year. The Dow Jones dropped 1 per cent, while the Nasdaq composite tumbled 1.6 per cent.

Tweet of the day

Quote of the day

“This is an important change which recognises the significance of audio to our audiences and the role it will play in the future of the ABC,” said the ABC’s outgoing managing director David Anderson as he announced to staff that the public broadcaster will reverse its recent organisational restructure and carve out a standalone audio division, placing the medium at the forefront of the ABC’s future.

The move comes just 16 months after the ABC brought all of its functions under two streams - a news division and a standalone content streams.

You may have missed

Sexual harassment and discrimination remain rife in Australia’s technology start-ups and women are leaving as a result, according to a new report that paints a bleak picture of the financial and human toll on some of the nation’s fastest-growing businesses.

Grapevine, a women-led collective that began in 2023 in a bid to expose and address inequality in Australia’s technology sector, has released a report into the financial impact of toxic workplace behaviours, drawing on stories from hundreds of employees across the sector.

Read David Swan’s exclusive which reveals the mounting number of allegations of inappropriate behaviour at software firm WiseTech Global and coding program Grok Academy.

With AP

The Market Recap newsletter is a wrap of the day’s trading. Get it each weekday afternoon.