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A lacklustre week for investors continued with a third loss from four sessions following a mixed close on Wall Street and an increase in the New South Wales Covid cluster.

The S&P/ASX 200 fell as much as 34 points this morning after NSW announced 11 new locally-acquired coronavirus cases. A partial recovery trimmed the index’s final loss to 23 points or 0.32 per cent.

What moved the market

Barring a 94-point rebound tomorrow, the market is on track for its first weekly decline since mid-May. Buying interest has dropped off since last Wednesday’s record close, thanks to inflated prices, the looming end of the tax year, doubts about the rates outlook here and overseas, and the threat of a lockdown in the nation’s most populous state.

The market hit its morning low shortly after NSW health authorities announced 18 locally-acquired Covid-19 cases in the 24 hours to 8pm last night (including 13 reported yesterday), plus an additional six cases overnight for a total of 11 new cases since yesterday’s update.

“This is perhaps the scariest period that New South Wales is going through,” NSW Premier Gladys Berejiklian said.  

While no new restrictions were announced, travel industries in other states were set to take a hit as borders close in the midst of school holidays. Queensland, in particular, was set to lose millions in cancelled bookings.

Most travel and tourism stocks declined. Qantas shed 1.91 per cent, Helloworld Travel 1.21 per cent, Sydney Airport 0.17 per cent and Flight Centre 0.13 per cent. Corporate Travel Management rose 1.64 per cent. Webjet closed flat.

The interest rates debate continued with NAB standing by its prediction the Reserve Bank will delay any rise until 2024. Commonwealth Bank yesterday predicted rates may rise as soon as next year. Westpac expects three hikes in 2023.

“NAB’s view is that while we can see a probability of the RBA moving in H2 2023 and markets should price in this risk, given the high bar the RBA has given itself on wages growth being sustained at 3% plus, we currently pencil in 2024 as being more likely,” Tapas Strickland, NAB Director, Economics, wrote.

Local investors were unmoved by positive signals ahead of tonight’s US session. S&P 500 futures climbed nine points or 0.2 per cent.

Overnight, US stocks finished mixed, but little changed. The Dow and S&P 500 shed between 0.1 and 0.2 per cent. The Nasdaq Composite gained 0.13 per cent.

Winners’ circle

Afterpay hit its highest level since early March, rising for a sixth session as inflation worries continued to abate. The buy now pay later leader was the most prominent victim of this year’s inflation tantrum, losing almost half its value between February and May. A 6.18 per cent rise this session extended its bounce since the May low to around 60 per cent.

Other tech gainers today included Appen +2.54 per cent, WiseTech +1.7 per cent and EML Payments +2.16 per cent.

The big three miners have risen steadily, supported by improving commodity prices since a rally in the US dollar peaked on Monday. Fortescue Metals put on 1.16 per cent, Rio Tinto 1.23 per cent and BHP 0.93 per cent.  

Coles gained 1.63 per cent. Online retailer Kogan climbed 5.89 per cent.

Cimic edged up 0.1 per cent on news some of its subsidiaries had been chosen by the Victorian government as part of a consortium to build the North East Link in Melbourne.  The company expects revenue of around $4 billion over the construction and operations phase.

Medical software firm Pro Medicus reversed yesterday’s dump, bouncing 6.9 per cent. Other standouts today included Seven West Media +4.44 per cent, Pilbara Minerals +3.69 per cent and Incitec Pivot +3.4 per cent.

Doghouse

Woolworths dived 11.2 per cent as it divested the Endeavour drinks business that owns Dan Murphy’s and other brands. Endeavour shares debuted at $6.60 and finished at $6.02.  

Westpac eased 0.96 per cent after announcing it will hold onto its New Zealand operations after exploring a demerger.  

Westpac Group Chief Executive Officer, Peter King, said, “After a detailed review, we believe a demerger of the WNZL business would not be in the best interests of shareholders. Our review identified opportunities to improve service for customers and value across the WNZL business and we will progress these with the WNZL Board and management team.”

CBA gave up 0.55 per cent, ANZ 0.81 per cent and NAB 1.06 per cent. Other major drags included CSL -2.6 per cent, Newcrest -1.34 per cent and Woodside -1.18 per cent.

Wearable sports tech firm Catapult dropped 8.26 per cent after completing a $35 million institutional placement to fund its purchase of sports software video provider SBG Sports Software.

Other markets

Asian markets marked time. The Asia Dow inched up 0.05 per cent. Hong Kong’s Hang Seng added 0.14 per cent. Japan’s Nikkei dipped 0.09 per cent. China’s Shanghai Composite dropped 0.05 per cent.

Gold unwound last night’s advance, falling $6.40 or 0.36 per cent to US$1,777 an ounce. The Brent crude continuous contract rose 15 cents or 0.2 per cent to US$74.65 a barrel.

The dollar eased 0.03 per cent to 75.71 US cents.

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