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The share market’s equal-best winning run of the year ended this afternoon at five as profit-taking in the US infected local trade.
The S&P/ASX 200 declined 48 points or 0.68 per cent to its heaviest loss of the month. The retreat pulled the index off a 13-month peak and reversed more than three days of gains.
Declines in CSL, the banks and most of the big miners swamped gains in Goodman Group, Coles, Fortescue Metals and Telstra.
What moved the market
A market that had risen more than 320 points in three weeks with barely a pause looked ripe for a retrace and found an excuse when Wall Street reversed. The sell-off accelerated as the dollar climbed above 78 US cents for the first time in a month. The Aussie was last up 0.5 per cent at 78.01 US cents
The S&P 500 fell 0.53 per cent overnight and the Nasdaq Composite lost 0.98 per cent as the first full week of the US Q1 corporate earnings season got underway.
“The market has had a huge jump to the upside so it needs to take a little bit of rest,” Peter Cardillo, chief market economist at Spartan Capital Securities, told Reuters. “For now it’s just a little bit of profit taking as traders await results from big tech names on Wall Street.”
Australian traders were unmoved by strengthening US futures or near-decade highs in iron ore and copper. S&P 500 futures rallied 11 points or 0.26 per cent this afternoon following a well-received after-hours update from IBM. Shares in Big Blue climbed almost 3 per cent in after-hours trade.
Iron ore producers traded mixed despite a solid quarterly from Rio Tinto and rises in bulk metals. Iron ore climbed above US$180 a tonne yesterday for the first time since September 2011. Copper also neared its highest level in a decade.
Rio Tinto faded 0.54 per cent after reaffirming full-year production guidance. The company increased Q1 iron ore shipments by 7 per cent over the same quarter last year. CEO Jakob Stausholm described the quarter as “an overall solid operating performance”.
Winners’ circle
Gains at the business end of the market were slight. Telecoms was the only sector to advance. Telstra gained 0.45 per cent, Fortescue Metals 1.89 per cent, property giant Goodman 1.48 per cent, Coles 0.71 per cent and Transurban 0.14 per cent.
On the wider market, the best performers were Mineral Resources +3.02 per cent, Bank of Queensland +2.69 per cent and Healius +2.49 per cent.
Latitude Financial finally made it onto the boards at the third attempt. Shares offered at $2.60 climbed as high as $2.99 before easing to $2.70, a gain of 3.85 per cent. The Ahmed Fahour-led group abandoned its previous IPO attempt after investors baulked at the asking price.
Temple & Webster inched up 1.49 per cent after announcing plans to invest heavily in growing the business. The online furniture retailer said Australia was undergoing a “once in a generation” shift in shopping habits to online. The company increased its Q3 revenues by 112 per cent versus the same period last year. The growth strategy will involve investing in brand awareness, promotions, technology and new products.
Doghouse
BNPL darling Afterpay slumped 0.77 per cent after informing shareholders it was considering a secondary listing in the US. The company said a US listing made sense “given the US market is now the largest contributor to our business and is expected to grow strongly”. Underlying sales in the US increased 211 per cent quarter on quarter in the first three months of the year. The company’s headquarters would remain in Australia.
Fund manager Challenger tanked 15.76 per cent after declaring full-year net profit was expected to be at the bottom end of previous guidance of $390-$440 million. The company said a sharp decline in credit spreads had not been reflected in customer pricing.
Wet weather and breakdowns knocked about 10 per cent off production at coal miner Coronado Global‘s Australian operation. The company’s US operation saw stronger prices from the Chinese ban on Australian imports. Overall group sales fell 10.5 per cent quarter on quarter, due to the Lunar New Year. The share price slumped 7.74 per cent.
Woolworths moved to a majority stake in analytics business Quantum, increasing its shareholding from 47 per cent to 75 per cent at a cost of $223 million. The companies have worked together for eight years on products and marketing. Woolworths’ shares dipped 0.9 per cent.
A drop in sales revenue helped pull Lynas Rare Earths down 8.31 per cent. The company attributed the decline from $119.4 million in Q2 to $110 million last quarter to problems with shipping availabilities due to Covid and the Suez Canal blockage.
Resolute Mining lost 2.8 per cent after Chinese firm Chifeng Jilong Gold terminated an agreement to buy the company’s Bibiani mine in Ghana. The decision follows the Ghanaian government’s refusal to recognise the sale. Chifeng asked Resolute to return its US$5 million deposit.
CSL sank 1.62 per cent, Aristocrat Leisure 1.52 per cent and Woodside 1.19 per cent. Turning to the banks, CBA fell 1.24 per cent, ANZ 0.93 per cent, NAB 0.67 per cent and Westpac 0.57 per cent.
Other markets
A mixed session on Asian markets saw the Asia Dow decline 0.72 per cent and Japan’s Nikkei 1.98 per cent. China’s Shanghai Composite rallied 0.24 per cent and Hong Kong’s Hang Seng 0.19 per cent
Oil was boosted by reports of shutdowns on Libyan oilfields over delayed government payments. Brent crude rallied 84 cents or 1.25 per cent to US$67.89 a barrel.
Gold pared overnight weakness, edging up 90 cents or 0.03 per cent to US$1,771.50 an ounce.
