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Rivers of gold pouring into shareholders’ accounts in the form of dividend payments helped knock the ASX lower for a second day as two of the market’s largest companies traded ex-dividend.

The S&P/ASX 200 touched its weakest level in two weeks before halving its loss to 41 points or 0.55 per cent. At its morning low, the index was briefly off 90 points..

BHP and CSL accounted for much of the decline as they traded without the right to a dividend. Gain in Fortescue Metals, Afterpay and Macquarie Group prevented a deeper loss.

What moved the market

Early days, but the market has yet to record a gain as it enters what has in recent times been one of the weakest months of the year. The ASX 200 has gone backwards during five of the last seven Septembers. That unhappy record includes last September – the only losing month in the 17 since the pandemic bottom.

A key reason is the disbursement of dividends. With the full-year earnings season over, payments are starting to flow. BHP will pay a record final dividend of US$2 per share (A$2.73) after strong iron ore prices helped lift after-tax full-year profit 42 per cent to US$11.3 billion. The loss of the right to that dividend pulled the miner’s shares down 6.86 per cent today.

CSL – one of the market’s big three, alongside Commonwealth Bank – declined 1.82 per cent. Another top twenty firm, supermarket Woolworths, shed 1.53 per cent as it also went ex-dividend.

The broader market struggled for traction in the wake of a mixed finish on Wall Street and sharp declines in iron ore and copper. The most balanced of the major US indices, the S&P 500, edged up 0.03 per cent. The Dow dipped 0.14 per cent. The Nasdaq added 0.33 per cent. Iron ore slumped 5.9 per cent and copper 2.1 per cent.  

Support for exporters in the form of a weakening dollar has dissipated over the last few sessions. The Aussie has bounced almost three cents in two weeks after global growth fears subsided. The local currency was last up 0.25 per cent at 73.82 US cents.    

Bond proxies lost some of their appeal as yields reversed around half of yesterday’s rally. The yield on ten-year Australian government bonds receded almost four basis points.

Winners’ circle

Tech stocks gained momentum after lunch as bond yields retreated. Altium rallied 4.34 per cent, Nextdc 2.7 per cent and Afterpay 0.85 per cent.

One of reporting season’s biggest winners, biopharma Clinuvel, climbed 4.22 per cent despite going ex-dividend.  

Fallen stars ranked amongst the index’s best gainers. Biotech Mesoblast bounced 2.87 per cent from a two-day post-earnings bloodbath. Polynovo, whose shares traded above $4 in December, rose 3.79 per cent to $2.19.

Some of the banks turned positive late morning despite pressure on lending rates. CBA edged up 0.37 per cent, NAB 0.53 per cent and Macquarie Group 0.75 per cent. ANZ dipped 0.25 per cent and Westpac 0.31 per cent.

Other gains at the top end included Aristocrat Leisure +0.79 per cent, Transurban +0.63 per cent and Goodman +0.52 per cent.

Flight Centre firmed 0.53 per cent as the travel agent continued its push into the Asian corporate market. The company has struck a deal with Tokyo-based NSF Engagement Corporation to launch Flight Centre’s FCM travel management business in Japan.

“As the world’s fourth largest business travel market, Japan will undoubtedly provide exciting growth opportunities for FCM both in terms of enhancing our offering to existing FCM customers throughout the world and attracting new customers in Japan,” FCM Asia managing director Bertrand Saillet said.

The speculative end of the market outperformed. The S&P/ASX Emerging Companies index climbed 0.71 per cent to a new high. The index has risen for seven of the last nine sessions.

Doghouse

Graincorp spin-off United Malt dropped 6.14 per cent after announcing it will take a provision of $20-$22 million relating to a bad debt and the collapse of a contractor. The company also warned lockdowns, increased shipping costs and supply chain issues were affecting consumption in Asia and Australia.

Rio Tinto fell for a third session, shedding 0.68 per cent. Fortescue Metals climbed 1.87 per cent. Chalice Mining lost 3.88 per cent, Regis Resources 3.63 per cent and Newcrest 1.51 per cent.

Other markets

Asian markets were mixed. China’s Shanghai Composite gained 0.5 per cent. Japan’s Nikkei added 0.16 per cent. Hong Kong’s Hang Seng eased 0.21 per cent and the Asia Dow 0.51 per cent.

S&P 500 futures were broadly steady, down a point or 0.02 per cent.

Oil retreated in the wake of last night’s OPEC+ decision to continue increasing production each month. Brent crude fell 28 US cents or 0.39 per cent to US$71.31 a barrel.

Gold inched up 50 US cents or 0.03 per cent to US$1,816.50 an ounce.

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