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The share market fell for a second day as declines in banking and energy stocks outweighed gains in tech firms and miners.
The S&P/ASX 200 fell in afternoon trade to a loss of 18 points or 0.24 per cent.
Earlier, the index gained as much as 16 points as mining stocks rose on hopes of higher demand for raw materials after the US Congress passed a trillion-dollar infrastructure spending bill.
NAB sank after reporting a decline in underlying profit. Gold miner Newcrest retreated on news it will pay $3.7 billion to acquire a Canadian miner.
What moved the market
A fade session in Asia and an accompanying fall in US equity futures snuffed out the market’s bid for a fourth gain in five sessions. US futures drifted lower amid on-going worries over China’s struggling property market and potential upheaval at the US Federal Reserve.
China’s state planner, the National Development and Reform Commission, met with developers following several defaults in recent weeks. It also emerged Federal Reserve Chair Jerome Powell has a fight on his hands to retain his role following reports President Joe Biden interviewed Fed Governor Lael Brainard for the top job last week. The betting odds on Powell retaining the role when his term expires in February declined.
S&P 500 futures dropped 13 points or 0.27 per cent. China’s Shanghai Composite eased 0.02 per cent, Hong Kong’s Hang Seng 0.07 per cent and Japan’s Nikkei 0.61 per cent.
Wall Street’s major indices look ripe for a retrace following an unusually long run of records. Overnight, the S&P 500 inched up 0.09 per cent to an eighth straight gain. The Nasdaq Composite logged an 11th straight rise, its longest win streak in almost two years.
The ASX has underperformed in recent months, hampered by the profit hit from lockdowns. Revenues are expected to rebound over the next few months with the release of pent-up demand as the eastern states reopen.
Business confidence figures released this morning showed sentiment rebounded last month amid strong trading conditions. NAB’s measure of confidence jumped from +10 to +21 last month. Conditions rose to +11 from +5.
“Conditions turned around in October, driven largely by the end of lockdown in NSW,” NAB Chief Economist Alan Oster said. “Confidence is now back in positive territory across all states and in all industries, signalling that there is broad optimism about the way recovery is tracking now that vaccine targets are within reach and restrictions are lifting,” he added.
Winners’ circle
Likely winners from the passage of US President Joe Biden’s long-awaited infrastructure spending bill set the early pace, but gains contracted by the close. BHP climbed 0.96 per cent to a one-week high. Fortescue Metals put on 1.81 per cent as it held its AGM. Rio Tinto dipped 0.19 per cent. Lynas Rare Earths added 7.59 per cent, IGO 4.84 per cent, Pilbara Minerals 4.37 per cent and BlueScope Steel 3.16 per cent.
Chalice Mining jumped 28.51 per cent on claims it had made the largest nickel sulphide discovery in two decades. The explorer said its Gonneville discovery north-east of Perth was also the largest platinum-group elements find in Australian history.
“Given its sheer scale, the attractive suite of six payable metals it contains and its premier location close to world-class infrastructure and services in Perth, Chalice clearly has the potential to become a leading global player in the green metals space,” Managing Director & Chief Executive Officer Alex Dorsch said.
Afterpay climbed 2.37 per cent during a positive session for the tech sector. Megaport advanced 4.32 per cent, Nearmap 1.8 per cent and Xero 0.71 per cent.
Other heavyweights to rise included CSL +0.89 per cent, Aristocrat Leisure +0.7 per cent and Brambles +0.19 per cent.
A revenue upgrade helped lift Seven West Media 4.63 per cent to a two-and-a-half-year high. The broadcaster said it was confident it would beat the consensus forecast for full-year earnings of $260 million by between 7 and 10 per cent. The upgrade followed a 145 per cent rise in revenue from 7plus since the start of the financial year.
Surfing and adventure sports retailer Kathmandu climbed 0.66 per cent after outlining the impact of lockdowns on first-quarter trade. Store sales at Rip Curl declined by 9.4 per cent and at Kathmandu by 17.6 per cent. Online sales increased by 33.8 per cent.
Doghouse
A doubled dividend payment and a 76.8 per cent jump in full-year cash earnings cushioned a decline in NAB. The share price dropped 0.76 per cent on news of a 3 per cent dip in operating revenues following a challenging year for the markets and treasury business. Expenses increased by 1.8 per cent. Underlying profit declined by 6.8 per cent.
“FY21 has been a difficult period for Markets & Treasury income but excluding this, revenue was stable over the year and 2 per cent higher in 2H21 compared with 1H21,” CEO Ross McEwan said.
CBA retreated 1.2 per cent, ANZ 1.55 per cent and Westpac 1.4 per cent.
Gold miner Newcrest skidded more than 5 per cent in early trade after announcing the acquisition of Canadian miner Pretivm. The Australian company will acquire the remaining 95.2 per cent of shares in Pretivm that it does not own in a deal valuing its target at $3.7 billion. The cash portion of the deal will be funded from Newcrest’s balance sheet. Shares trimmed their decline to 1.58 per cent at the close.
James Hardie hovered near record levels after reporting profits almost tripled over the half-year ending September 30. Net profit attributable to shareholders jumped 182 per cent to US$271.5 million on record quarterly sales in the second quarter. Shares in the company, which hit an all-time high yesterday, eased 0.72 per cent.
A rebound in rent collection helped keep Westfield shopping centre operator Scentre Group near a pandemic-era high. The company collected $1.8 billion in rent for the ten months to the end of October, including $607 million since the end of June. The share price dipped 1.26 per cent.
Other markets
Brent crude slipped 14 US cents or 0.2 per cent to US$83.29 a barrel.
Gold dipped US$2.60 or 0.14 per cent to US$1,825.40 an ounce.
The dollar halved its fall to 0.1 per cent at 74.08 US cents.
