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The share market closed at a seven-week low as soft Chinese economic data pushed the dollar below 70 US cents and sapped buying interest in mining stocks.

The S&P/ASX 200 shed 85 points or 1.18 per cent. Today’s close was the weakest since mid-March. The index dipped briefly below 7100 before closing at 7121.

Bulk metal miners declined as Chinese trade data underlined the impact of Covid lockdowns on supply chains and factory output. Energy and select defensive sectors resisted the downtrend.

What moved the market

The share market added to three weeks of losses as weak overseas leads were compounded by signs of slowing growth in major trading partner China and souring US equity futures. Shanghai and Beijing reportedly tightened Covid restrictions over the weekend.

Growth in Chinese exports last month was the slowest since June 2020, according to customs data released today. Imports were flat as Shanghai, the world’s largest port, went into lockdown.  

The trade figures continued a run of soft April Chinese data that helped send iron ore down almost 5 per cent on Friday. Copper hit a four-month low earlier in the week. ING announced a downward revision to its Chinese growth forecast, warning the Shanghai lockdown appeared likely to drag on until the end of the month.

The Australian dollar – seen by some forex traders as a proxy for commodity strength – fell as low as 69.96 US cents this afternoon, according to MarketWatch. Today’s low was the weakest reading since late January. The Aussie was down almost 0.7 per cent at 69.97 US cents in late-afternoon trade.

The ASX was already under pressure from Wall Street’s longest run of weekly losses in more than a decade. The S&P 500 fell 0.57 per cent on Friday to a fifth straight losing week. The Nasdaq sank 1.4 per cent to a two-year closing low. The Dow dropped 0.3 per cent, sealing a sixth weekly loss.

Negative US futures this afternoon underlined the sour mood. S&P 500 futures dived 45 points or 1.1 per cent. Dow and Nasdaq futures declined by at least 1 per cent.

The speculative end of the Australian market – a barometer of risk appetite – came under particular pressure. The S&P/ASX Emerging Companies Index skidded 4.05 per cent to an eight-month low. The Small Ords fell 2.9 per cent to a level last seen in February 2021.

Winners’ circle

Westpac was the pick of the heavyweights, rising 3.23 per cent as investors cheered an increased dividend and a sharp reduction in costs. The bank’s first-half net profit of $3.28 billion was up 63 per cent on the previous six months, but down 5 per cent on the same period last financial year.

Decreased costs and a reduction in bad debts allowed the bank to hike its interim dividend to 61 cents per share despite contracting margins.

“I’m pleased with our progress on costs which are down 27%, or 10% excluding notable items, compared to the second half of 2021. This includes a reduction in headcount of more than 4000 as we track towards our target of an $8 billion cost base by FY24,” CEO Peter King said.

The only sectors to resist today’s downtrend were energy, healthcare and consumer staples. CSL put on 0.84 per cent, Santos 0.37 per cent and Woodside Petroleum 0.61 per cent.

Havens to attract a bid included Woolworths +0.55 per cent and Coles +0.64 per cent. Domino’s Pizza rallied 1.98 per cent. Ramsay Health Care bounced 1.22 per cent.

Doghouse

Rate-sensitive growth stocks were once again the market’s whipping boys, continuing this year’s pattern. Novonix shed 12.31 per cent, Imugene 11.11 per cent and Megaport 8.56 per cent.

Magellan announced it was selling its 11.6 per cent stake in Mexican fast food firm Guzman y Guzman for $140 million to refocus on its core funds management business. Shares in the firm dropped 8.41 per cent.

Troubled gaming group Star Entertainment shed 0.99 per cent on news it was suspending its VIP rebate programs while it fixes issues raised during a NSW inquiry.

Aged care provider Estia Health eased 4.14 per cent after warning of a delay in recovering Covid costs. The company has applied for government grants to recoup additional costs imposed by Covid regulations, but slow processing times meant a “significant portion” would not be approved before June 30.

News Corp fell 8.83 per cent to a 16-month low in the wake of Friday’s poorly-received trading update.

A sharp end-of-week decline in bulk metals weighed on the major miners. Fortescue Metals shed 5.76 per cent, Rio Tinto 2.25 per cent and BHP 1.26 per cent.

The real estate investment trust sector slumped 4.2 per cent to an 11-month low amid speculation about the impact of higher rates. Goodman Group gave up 6.99 per cent, Cromwell Property 4.73 per cent and Growthpoint Property 4.52 per cent.

ANZ fell 3.18 per cent as its shares traded ex-dividend.

Other markets

A tough session on Asian markets saw the Asia Dow lose 1.62 per cent, Japan’s Nikkei 2.46 per cent and China’s Shanghai Composite 0.5 per cent.

Oil retreated in volatile trade. Brent crude was lately down 14 US cents or 0.1 per cent at US$112.25 a barrel after trading below US$111 this morning.

Gold faded US$11.40 or 0.6 per cent to US$1,871.40 an ounce.

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