Join our daily newsletter At The Bell to receive exclusive market insights
A struggling ASX ran out of steam this afternoon as our benchmark index retreated back below 6200 points.
The local share market was in for a tough day after a sorrowful overnight session on Wall Street. While Australia slept, the Dow Jones, S&P 500, and Nasdaq each tumbled between 1.44 per cent and 1.65 per cent.
Nevertheless, our own S&P/ASX 200 index fought of the worst of the losses throughout the morning, down just 0.3 per cent and still above 6200 points by midday. Alas, the index lost its grip in afternoon trade and closed 0.72 per cent lower at 6184.6 points.
It seems the main catalyst for the weak US market is stalled stimulus negotiation talks as Democrat House Speaker Nancy Pelosi and Republican Treasury Secretary Steven Mnuchin struggle to reach an agreement.
However, US futures are looking up this afternoon after a Democrat spokesperson tweeted that the two parties may agree on a stimulus package before the end of Tuesday.
Unfortunately, the tweet wasn’t enough to spur the Aussie market into action.
Our heavyweight materials and financials sector anchored the market and deeply offset some sturdy tech gains.
Our materials sector retreated 1.14 per cent despite iron ore giant Fortescue Metals’ best efforts. While Fortescue gained 0.59 per cent, its mining peers, BHP and Rio Tinto slipped 1.64 per cent and 1.5 per cent, respectively.
A subdued gold subsector added insult to injury. Evolution Mining and Regis Resources each fell over 2 per cent. Northern Star lost 0.25 per cent and Saracen lost 0.49 per cent. Perseus Mining fell 5.43 per cent. In fact, of our top 10 biggest gold stocks, only Newcrest managed to closed green, up by 0.57 per cent.
At the same time, our big four banks held the financials sector down. Westpac lost 1.44 per cent, Commonwealth Bank lost 1.24 per cent, NAB lost 1.08 per cent, and ANZ lost 0.97 per cent. Investment banker Macquarie Group lost 0.91 per cent.
On the inverse, the technology sector ignored the sad day and surged 1.69 per cent ahead. Sector leader Afterpay once more led the charge, this time because of a Westpac partnership to create a new consumer savings account for Afterpay customers to control to create their budget and manage their spending. The buy now, pay later stock tacked on 4.51 per cent and hit triple digits for the first time, closing at $101.94. Meanwhile, Xero gained 0.52 per cent and WiseTech gained 1.07 per cent.
Across the Pacific, it’s a day of red for Asian indexes. As the ASX closes for the day, the Asia Dow is down 0.55 per cent, the Nikkei 225 is down 0.58 per cent, and the Hang Seng is down 0.13 per cent. The Shanghai Composite is lower by 0.17 per cent.
The Australian dollar is lower, too, and currently buying 70.44 US cents, 54.41 pence, and 11.65 South African Rand.
Today’s ups and downs
Residential property developer Sunland Group (ASX:SDG) soared today after its management announced a strategic shift in focus from new projects to paying off debt and improving value for shareholders. Essentially, the company said it feels its share price is undervalued, so it will sell inventory and limit project development to return to its shareholders current net asset value of $2.56 per share. Sunland shares surged 46.62 per cent to their highest point since March 2015, closing worth $1.95 each.
Meanwhile, small-cap biotech company Holista Colltech (ASX:HCT) fell victim to some serious profit-taking today as it lost almost a third of its value. The company soared yesterday after announcing its Path-Away compound was proven effective in killing 99.9 per cent of SARS-CoV-2, which causes COVID-19. However, Holista has had a rollercoaster year so far, and it seems investors weren’t keen to wait around to see if the share-price surge would stick this time. Shares in HCT tumbled 32.35 per cent to close worth 11.5 cents each.
