ASX posts fifth day of losses as weak China data weighs on miners

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

The numbers

The Australian sharemarket made a dour start to the week, as falling iron ore prices and weak Chinese economic data dragged the local bourse to its fifth day of losses in a row.

The S&P/ASX 200 index fell 46.5 points, or 0.6 per cent, to 8249.5 points at the close on Monday. Nine of the 11 industry sectors ended in the red. The Australian dollar edged higher and was trading at 63.76 US cents as at 4.46pm.

There were more than twice as many decliners than gainers on the New York Stock Exchange.Credit: Bloomberg

The lifters

The best performing sector on Monday was financials as all big four banks advanced. Westpac (up 0.8 per cent) led the rally, followed by Commonwealth Bank (up 0.3 per cent), ANZ (up 0.2 per cent) and NAB (up 0.2 per cent). Insurers Suncorp (up 0.8 per cent) and QBE (up 0.4 per cent) also moved higher.

Woolworths (up 0.7 per cent) and Coles (up 0.1 per cent) both lifted. Kmart and Bunnings owner Wesfarmers (up 0.5 per cent) and Harvey Norman (up 1 per cent) also climbed.

Meridian Energy gained 2.8 per cent. It was joined by Origin Energy (up 0.2 per cent) in the green.

The laggards

No sector fell more than mining on Monday (down 2 per cent), as iron ore prices took a hit after hopes of increased trade with China were struck down last week. The domestic bourse was also hampered by dispiriting November economic figures out of China.

Giants BHP (down 2 per cent), Fortescue (down 3.8 per cent) and Rio Tinto (down 1.7 per cent) all dropped. Pilbara Minerals (down 3.1 per cent) and Northern Star Resources (down 2.1 per cent) were also firmly in the red. Uranium miner Boss Energy lost 8.1 per cent.

DigiCo Infrastructure REIT, which joined the ASX on Friday in the biggest float of 2024, slumped by 5.5 per cent after the stock disappointed on its first day of trading last week. Financial services firm HMC Capital, which has a 32 per cent stake in DigiCo, was the worst performing stock on Monday (down 13.7 per cent).

Energy giants Woodside (down 0.5 per cent) and Santos (down 0.3 per cent) fell, while embattled IT firm WiseTech Global dropped 1.8 per cent. TechnologyOne (down 1.5 per cent) and Xero (down 0.3 per cent) also went backwards.

The real estate sector (down 1.4 per cent) also suffered losses. Goodman Group (down 1.8 per cent), Mirvac (down 2.8 per cent) and Stockland Corporation (down 1 per cent) all lost ground.

Sigma Healthcare, the company set to merge with Chemist Warehouse early next year, dropped 4.3 per cent after the companies released new details of the merger through a scheme booklet on Friday.

Ventia shares retreated by 9.2 per cent. The Australian Competition & Consumer Commission last week began civil proceedings in the Federal Court against the infrastructure provider for alleged price fixing.

The lowdown

Tribeca Investment Partners lead portfolio manager Jun Bei Liu described the movement of Sigma Healthcare as the “big one” on Monday, following the release of new details surrounding its merger with Chemist Warehouse on Friday.

Liu found the “worry and concern” displayed by investors a “bit unusual”, saying that the stock presented good opportunity for investors leading into the mega-merger. She remained confident in Australia’s mining stocks, expecting the sector to enjoy a “meaningful uplift” by next month.

AMP chief economist Shane Oliver said a “clearer stimulus” from China was needed to inform the future performance of Australia’s mining stocks.

“It depends on what happens out of China, and that’s a bit of a guessing game,” Oliver said. “The risk is they may not announce anything before (US President-elect Donald) Trump comes to power in January. We may be waiting a while yet.”

Major stock indexes on Wall Street drifted to a mixed finish, capping a rare bumpy week for the market.

The S&P 500 ended essentially flat, down less than 0.1 per cent, after wavering between tiny gains and losses most of the day.

The benchmark index posted a loss for the week, its first after three straight weekly gains.

The Dow Jones slipped 0.2 per cent, while the Nasdaq composite rose 0.1 per cent, ending just below the record high it set on Wednesday.

Wall Street’s rally stalled amid mixed economic reports and ahead of the US Federal Reserve’s last meeting of the year next week, when it is widely expected to cut interest rates for a third time since September.

Expectations of a series of rate cuts have driven the S&P 500 to 57 record highs this year.

Tweet of the day

Quote of the day

“These are high quality, high calibre people and together they represent the best mix of relevant skills and abilities and experience.”

That’s Treasurer Jim Chalmers, after announcing the appointments to the Reserve Bank’s new governance and monetary policy boards. In addition to the existing RBA board members, Marnie Baker and Renee Fry-McKibbin will join the monetary policy board and Jennifer Westacott, David Thodey, Danny Gilbert and Swati Dave will serve on the governance board.

You may have missed

Australia’s big four banks have cut their lending to fossil fuel companies by more than 20 per cent in the past two years, as activists pressure the lenders to provide financing only to customers who have strong climate transition plans.

A Macquarie analysis of banks’ environmental, social and governance strategies found the Commonwealth Bank, ANZ, Westpac and National Australia Bank had slashed their lending to oil and gas, metallurgical and thermal coal businesses from $43.4 billion in 2022 to $34 billion this year. ANZ has the largest exposure driven by oil and gas.

With AP, AAP

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