ASX falls, dragged down by miners; Woolworths plunges

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

The numbers

The Australian sharemarket closed marginally lower on Wednesday, dragged down by miners amid softening iron ore prices, as a slew of disappointing company results weighed on investor sentiment.

The S&P/ASX200 plunged to 8211.3 points shortly after markets opened, but wound back losses throughout the day to close 12.9 points, or 0.2 per cent, lower at 8239 points, with five of the 11 industry sectors retreating.

The Australian dollar fetched 63.23 US cents as at 4.42 pm AEDT.

Wall Street had another losing session, failing to provide a boost to the Australian market.Credit: Bloomberg

The lifters

Energy was the only sector firmly in the green, lifted by a 2.8 per cent gain for Woodside. The $46 billion energy giant reported on Tuesday its statutory net profit for the year rose 115 per cent, extending its gains from the previous trading session.

Embattled tech group WiseTech shares rallied 2.1 per cent after it unveiled a booming half-year result with total revenue up 17 per cent to $US327 million ($515 million), net profit rising 38 per cent to $US77.1 million and cash flow of more than $US100 million.

Investors also lapped up news that founder Richard White has taken on the role of executive director after its independent directors and chairman left the board as of today, with some having feared the disgraced billionaire would be ousted from the company he had built into a success story.

Engineering firm Worley and auto parts company Bapcor jumped 10.3 per cent and 13.4 per cent, respectively, after investors cheered their upbeat earnings results. Meanwhile, PointsBet shares soared 32.5 per cent after two bidders emerged to buy the sports gambling company – Japanese consumer tech company Mixi and its local rival BlueBet.

The big four banks rewound losses in early trade to edge into the green at the close, with CBA (up 1.3 per cent), NAB (up 0.4 per cent), Westpac (up 0.8 per cent) and ANZ (up 1.4 per cent) all rising. It follows a pullback in bank shares last week amid fears the sector could be overvalued.

The laggards

The slump in mining shares continued, with the sector down 1.6 per cent after having extended its losses from the morning. BHP, the world’s biggest miner, was down 1.5 per cent, while its smaller rivals Fortescue and Rio Tinto plunged 3.6 per cent and 3.4 per cent, respectively. Gold mining company Newmont fell 2 per cent after gold prices weakened overnight.

Other sectors of the sharemarket similarly seesawed. Consumer staples ended down 1.1 per cent, giving up early gains after country’s biggest supermarket chain Woolworths slumped 3 per cent. Its rival Coles bucked the trend, edging up 0.2 per cent.

It comes after Woolworths said its net profit fell 20.6 per cent in the latest half and forecast further earnings declines in the coming months, kicking off a $400 million cost savings push to bolster earnings.

Telstra slipped 0.6 per cent, while online jobs goliath Seek fell 1 per cent, dragging the communication services sector into the red. Kelsian Group was the worst-performing stock on the benchmark, tanking 15.2 per cent after the tourism operator posted lower first-half profits than expected.

Jewellery retailer Michael Hill fell 5.4 per cent after announcing that its CEO of the past seven years, Daniel Bracken, had died following an adverse reaction to treatment for an underlying medical condition.

The lowdown

Government figures released late morning showed that the monthly inflation rate has held steady, with prices climbing 2.5 per cent in the 12 months to January, while trimmed mean inflation – a figure the RBA keenly watches, which takes out the impact of the biggest price swings – was 2.8 per cent, just 0.1 percentage points higher than the previous month.

Josh Gilbert, a market analyst at eToro, noted that while inflation holding steady didn’t necessarily “provide a smoking gun for the RBA to continue cutting [interest] rates,” it “offers reassurance that inflation is moving in the right direction and supports the cut we saw earlier this month.”

“The biggest concern for policymakers and investors alike remains the view that disinflation may stall, hence the RBA’s hawkish stance despite cutting rates. We’ve seen this happen across the pond, where price pressures have persisted in the US and the Fed is easing off when it comes to cutting rates,” he said.

Overnight on Wall Street, US stocks extended their losing streak as households got more pessimistic about the economy because of inflation, tariffs and other policies coming from Washington.

The S&P 500 lost 0.4 per cent to make it four straight losing sessions after setting an all-time high last week. The Nasdaq composite lost 1.4 per cent, while the Dow Jones was an outlier and added 159 points, or 0.4 per cent. Within the S&P 500, the heaviest weights included high-momentum stocks that had been among Wall Street’s biggest stars in recent years. Nvidia fell 2.8 per cent, for example, while Tesla tumbled 8.4 per cent.

The US sharemarket has been sinking since the middle of last week after several weaker-than-expected reports on the economy thudded onto Wall Street. On Tuesday, the latest update said confidence among US consumers is falling by more than economists expected.

In the bond market, US Treasury yields pulled back as investors herded into investments generally seen as safer when the prospects of the world’s largest economy look rockier. Yields have been swinging sharply since President Donald Trump’s election, amid uncertainties about how his policies on tariffs, immigration and taxes could affect the global economy.

Additionally, Trump has antagonised US trading partners, threatening to raise tariffs and inviting them to retaliate with import taxes of their own. Trump said on Monday that tariff hikes on imports from Canada and Mexico will move ahead after a one-month delay.

Tweet of the day

Quote of the day

“The Wall Street honeymoon Donald Trump experienced in the initial months since his election victory appears to be ending, with the sharemarket sliding, bond yields falling, cryptocurrencies tumbling and consumer confidence evaporating.”

That’s Stephen Bartholomeusz on Wall Street’s sudden loss in confidence in the Trump administration. Read more of his column here.

With AP, Bloomberg

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