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Despite a surprise fall in the unemployment rate over August, a downtrodden night on Wall Street kept the local share market subdued today.
Around 110,000 jobs were created in August, tipping the unemployment rate to 6.8 per cent compared to July’s 7.5 per cent. This figure comes even though Melbourne was totally locked down in August, with regional Victoria in stage three restrictions.
The jobs increase defied expectations, but the welcome surprise wasn’t enough to get investors’ eyes off US futures. While the Dow Jones managed to tack on 0.13 per cent overnight, the S&P 500 and Nasdaq fell 0.46 per cent and 1.25 per cent, respectively. Futures are red across the board today, hinting at another weak session tonight.
As such, our benchmark ASX 200 index never kicked into gear. The index quickly fell in early action and then fell some more until it closed 1.22 per cent lower at 5883.2 points. This erases more than two-thirds of the index’s gains since Monday.
It seems hopes that the tech correction is over were premature, after just three sessions of green since September 3 on the tech-heavy Nasdaq. Down under, our own tech sector has largely followed the Nasdaq’s trends, and today was no exception.
Afterpay slumped 5.37 per cent today, WiseTech retreated 4.02 per cent, and Xero lost 2.12 per cent. In fact, of our biggest tech stocks on the index, only NEXTDC closed green, up by 0.09 per cent.
Yet, for all tech’s woes, it was the materials sector that anchored the market today. A sudden decline in the price of iron ore hit our local big-cap producers hard. Fortescue tumbled 6.4 per cent, Rio Tinto lost 3.38 per cent, and BHP lost 1.82 per cent.
Our gold subsector offered little respite; Saracen slipped 3.35 per cent, while Evolution, Northern Star, and Newcrest each lost between 0.64 per cent and 0.87 per cent.
A mixed day for our big banks kept the financials sector’s losses moderate, but that’s still nothing to write home about. NAB put on 0.87 per cent, Westpac gained 0.3 per cent, and ANZ increased by 0.12 per cent. Commonwealth Bank offset the gains with a 1.07 per cent fall.
Across the Pacific, it’s a similarly red picture across major Asian indexes. As the ASX closes for the day, the Asia Dow is currently down by 1.34 per cent and the Hang Seng by 1.72 per cent. Japan’s Nikkei 225 is 0.67 per cent lower and the Shanghai Composite is 0.45 per cent lower.
The Australian dollar retreated today and currently buys 72.78 US cents, 56.23 pence, and 11.92 South African Rand.
Today’s ups and downs
For the fourth time this week, a small and thinly-traded company surged without explanation. Today, it was junior iron ore explorer Admiralty Resources’ (ASX:ADY) turn. The company was up as much as 662 per cent mid-session, and when hit with an “explain yourself” query from the ASX, shrugged and said, “beats me.” Admiralty was up 157 per cent at market close, with shares worth 1.8 cents each.
Meanwhile, the subject of Tuesday’s junior skyrocket, Jupiter Energy (ASX:JPR) came crashing back down to earth today. After clarifying an operations update from Tuesday and coming out of its trading halt, shares in JPR quickly tumbled and the company closed 52.3 per cent lower at 6.2 cents each. This is a repeat of mid-April for Jupiter, when the company soared from less than one cent per share to 15 cents in just two days, then suddenly reverse back down to three cents per share.
