A 'risk-off' session saw Australian stocks retreat for a second day as Tropical Cyclone Damien and softening commodity prices weighed on resource stocks.
The ASX 200 dropped eight points or 0.1 per cent to 7015, led by declines in the energy and materials sectors. The retreat came as US crude dipped briefly below $US50 a barrel after Russia resisted calls for deeper production cuts. Industrial metals sank after a surge in the US dollar raised prices for holders of other currencies.
A weak set of trading leads included a losing end to a strong week on Wall Street as the rebound from the coronavirus scare lost momentum. The S&P 500 eased 18 points or 0.54 per cent on Friday, trimming its rise for the week to 3.2 per cent.
The energy sector slid to its lowest level since early November as a rout in crude extended into a sixth week. Brent crude fell 11 cents or 0.2 per cent this morning to $US54.36 a barrel. The US benchmark, West Texas Intermediate, dropped 19 cents or 0.4 per cent to $US50.12. Russia's energy minister on Friday said he needed more time to assess an OPEC proposal to cut global production. Here, Oil Search shed 3.1 per cent, Santos 0.4 per cent and Woodside 0.5 per cent.
The materials sector was another drag, falling 0.7 per cent after Cyclone Damien disrupted operations in the Pilbara. Fortescue slid 1.3 per cent to a one-month low. BHP slumped 1.2 per cent and Rio Tito 0.7 per cent. At time of writing, none of the major producers had issued updates on the impact of the cyclone.
The health sector led a mid-morning rebound, rising 0.7 per cent as CSL climbed 0.9 per cent to a new high. The supermarkets shone once again, Coles and Woolworths both rising 0.7 per cent. Newcrest added 2 per cent as gold miners attracted a bid. Telstra gained 0.9 per cent.
JB Hi-Fi continued to defy reports of a downturn in retail, surging 14 per cent to an all-time high after an upbeat half-year trading report. The discount electronics retailer announced earnings before interest and tax increased 8 per cent to a record $255.6 million as total sales hit a new peak of $4 billion.
Among other companies reporting, property investor GPT Group edged up 1.1 per cent as net tangible assets increased 3.9 per cent to $5.80 per security; and rail freight operator Aurizon rose 2.1 per cent as underlying earnings before interest and tax improved 12 per cent to $456 million.
The technology sector retreated further from Thursday's record high, falling 0.8 per cent as Afterpay gave up 1.5 per cent, Computershare 1.6 per cent and Wisetech 1.8 per cent.
US index futures slumped at the open but soon turned positive. S&P 500 index futures were recently ahead two points or almost 0.1 per cent after earlier falling more than 0.3 per cent..
China's Shanghai Composite fell 0.75 per cent, Hong Kong's Hang Seng 0.95 per cent and Japan's Nikkei 0.56 per cent.
Gold put on $1.70 or 0.1 per cent at $US1,575.10 an ounce.
The dollar rose 0.15 per cent to 66.82 US cents after Chinese inflation figures came in stronger than expected.
What's hot today and what's not:
Hot today: Gold explorer Sky Metals (ASX: SKY) briefly tripled its market capitalisation this morning after announcing "outstanding" results from its maiden drilling campaign at its Cullarin project near Goulburn, NSW. Both holes intersected mineralisation consistent with the "McPhillamy's style" gold sought by the company. "These are outstanding results," Sky CEO Mark Arundell said. "These drill results, combined with the soil results, upgrade both the potential tenor and scale of the Hume Target." The share price shot from 10.5 cents on Friday to 36.5 cents before settling 152.4 per cent higher at 26.5 cents.
Not today: A double whammy of bad news cost building products supplier Boral (ASX: BLD) more than 10 per cent of its value after a scandal at its North American Windows business forced it to revise previously issued earnings, and CEO Mike Kane announced he was quitting. The company said pre-tax earnings between March 2018 and October 2019 were overstated by $US24.4 million after unnamed employees in the US inflated the accounts to make the Windows business appear more profitable than it was. Kane will leave after the company's full-year results in August. The share price plunged 54 cents or 10.5 per cent to $4.61.