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Australian shares retreated with US equity futures and commodity prices as investors reduced their exposure ahead of a heavy week of economic data and US earnings.

The S&P/ASX 200 fell 76 points or 1.14 per cent to its first loss in three sessions.

Risk-off moves on futures and commodity markets fed a session-long fade. Mining and tech stocks led the retreat. By the close, healthcare was the only sector still ahead.

What moved the market

The trading week got off to a dour start as traders booked profits following the ASX’s best week since March. The ASX 200 climbed 2.1 per cent last week, its strongest return in 16 weeks.

Buying interest deteriorated today as most Asian markets, US equity futures, iron ore and crude oil declined.

A Covid lockdown in Macau and fines for Chinese heavyweights Alibaba and Ten Cent helped push Hong Kong’s Hang Seng index down 3.1 per cent. The Shanghai Composite dropped 1.5 per cent. The Asia Dow shed 0.79 per cent.

In the US, S&P 500 futures sank 27 points or 0.7 per cent ahead of a week that will offer an insight into the impact of higher rates and inflation on corporate earnings. Eighteen S&P 500 companies will report this week, including JPMorgan, Wells Fargo, Citigroup and Morgan Stanley.

“We think the current consensus forecast for near 10 per cent earnings growth over the next 12 months is too optimistic and is likely to be revised lower,” Daniel Grosvenor, director of global equity strategy at Oxford Economics, told the AFR.

ASX mining heavyweights fell with iron ore prices. The most-traded ore contact on the Dalian Commodity Exchange fell 5.1 per cent this afternoon. Prices have tumbled this year as a property slowdown and Covid restrictions curbed Chinese demand for steel.

Brent crude reversed US$1.22 or 1.1 per cent to US$105.80 a barrel as an early advance stumbled.

Winners’ circle

Defensive healthcare stocks clung to gains as the market mood soured. Imugene gained 2.17 per cent. Sonic Healthcare added 1.05 per cent, Healius 0.81 per cent and CSL 0.22 per cent.

Aside from CSL, the only heavyweights to advance were Telstra +0.78 per cent and Woodside +0.16 per cent.

Coal miner New Hope topped the index with a gain of 4.72 per cent. Rival Whitehaven tacked on 0.8 per cent.

A broker upgrade lifted SCA Property Group 1.41 per cent. Vicinity Centres firmed 1.6 per cent.

Bank of Queensland rose 0.58 per cent. Insurers QBE and Suncorp added 1.1 and 1.81 per cent, respectively.

Link Administration edged up 0.25 per cent after the board told suitor Dye & Durham it would have to do better. The firm announced the directors could not support a revised takeover offer of $4.57 per share from the Canadian software company. Link also announced its full-year result was expected to be slightly above guidance.

Doghouse

The sudden departure of CEO and Managing Director Tom Cregan drove EML Payments down 24.61 per cent to a four-year low. The payments firm announced Emma Shand would start immediately following Cregan’s resignation. No explanation was proffered for the change.

BHP declined 3.11 per cent after the UK’s Court of Appeal cleared the way for a group action to proceed following the failure of a dam in Brazil. The group action seeks compensation for people and businesses affected by the collapse of the Samarco dam.

Fruit and veg grower Costa Group slumped 7.99 per cent to a 28-month low amid worries over the prospects for this year’s citrus crop. The company acknowledged weather-related quality issues with this year’s crop but insisted its first-half calendar year result was still expected to be in line with expectations.

“Certain varieties have been affected, and at this stage of the harvest this has resulted in a lower percentage of first grade product versus the prior year,” the grower said.

Gold miners were back in the firing line after Friday’s fleeting respite. The ASX sub-sector dropped 2.7 per cent to its lowest since October 2018.

De Grey Mining shed 5.66 per cent, Evolution 4.9 per cent and Newcrest 2.53 per cent.

The tech sector suffered its first significant hit this month as bond yields rallied. Novonix slumped 11.38 per cent, WiseTech 2.91 per cent and Xero 3.19 per cent.

Other markets

Gold eased US$4.20 or 0.24 per cent to US$1,738.10 an ounce.

The dollar fell 0.47 per cent to 68.12 US cents.

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