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Aussie shares retreated further from 13-month highs as Asian markets and US futures soured.

The S&P/ASX 200 shed 33 points or almost 0.5 per cent by mid-session after a partial rebound faded. Gains in Telstra, CSL and some of the banks were outweighed by declines in CBA and the major miners.

What’s driving the market

Positive pre-market leads were overshadowed by a slump in US futures as Asian markets declined. Travel and tourism stocks dropped amid concerns about the stuttering national vaccination program. The ASX 200 hit a 13-month high on Thursday, but retreated next session after the government walked back its advice on the AstraZeneca vaccine.

US futures retreated following a 60 Minutes appearance this morning from Federal Reserve Chair Jerome Powell. S&P 500 futures sank nine points or 0.2 per cent. Powell told Americans the economy was at a turning point.

“What we’re seeing now is really an economy that seems to be much at an inflection point, and that’s because of widespread vaccination and strong fiscal support, strong monetary policy support,” Powell said in the interview. “We feel like we’re at a place where the economy’s about to start growing much more quickly and job creation coming in much more quickly,” he added.

US stocks hit record levels on Friday as buyers shrugged off evidence of growing inflationary pressures. The S&P 500 climbed 0.77 per cent. The Dow added 0.89 per cent and the Nasdaq 0.51 per cent.

“With earnings season set to kick off this week, investors prepared by snapping up stocks at a fast and furious pace anticipating that this year’s hottest trades will receive another boost from earnings season,” Stephen Innes, Chief Global Market Strategist at Axi, said. “Substantial operating leverage, a forceful rebound in consumer splurge and fiscal stimulus provide the recovery’s key pillars,” he added.

The Asia Dow dropped 0.46 per cent this morning. China’s Shanghai Composite shed 0.65 per cent, Hong Kong’s Hang Seng 1.12 per cent and Japan’s Nikkei 0.51 per cent.

Here, “reopening stocks” declined for a second day after the government abandoned its vaccination targets over the weekend, citing uncertainties over supply. Qantas fell 2.4 per cent, Webjet 1.7 per cent, Star Entertainment 1.6 per cent, Crown Resorts 1.2 per cent and Flight Centre 0.9 per cent.

Uranium stocks retreated following an incident at an Iranian nuclear facility over the weekend. Iran’s nuclear chief Ali Akbar Salehi branded the incident an act of “nuclear terrorism”. Paladin Energy sank 9.1 per cent, Boss Energy 12.1 per cent, Peninsula Energy 7.7 per cent and Deep Yellow 10.4 per cent.

Going up

The tech sector touched a seven-week peak as repairwork continued from the Feb-March bond-yield storm. Appen and Xero climbed 1.5 per cent, NextDC 1.2 per cent and Altium 0.3 per cent. BNPL leaders Afterpay and Z1P Co put on 0.4 and 0.7 per cent, respectively.

AstraZeneca vaccine manufacturer CSL bounced 0.4 per cent to keep the healthcare sector in positive territory. Cochlear added 1.6 per cent and ResMed 1.4 per cent.  

A mixed morning for the banks saw NAB tack on 0.4 per cent, Westpac 0.2 per cent and ANZ less than 0.1 per cent. CBA dipped 0.6 per cent and Macquarie shed 1.2 per cent. Other heavyweight winners included Telstra +0.7 per cent and Wesfarmers +0.1 per cent.

Seven West Media and Corporate Travel Management were the index’s best performers, rising 3.1 and 2.6 per cent, respectively. Lithium miner Pilbara Minerals climbed 1.7 per cent.

Going down

Dairy company Synlait fell 1.9 per cent on news CEO Leon Clement had fallen on his sword. The diary company’s share price hit an all-time high of $12.28 in September 2018, the month Clement was appointed, but has more than halved since as Covid undercut earnings. The board acknowledged “the substantial impact that COVID-19 has had on Synlait and the difficult challenge this would present to any management team”. Co-founder and former CEO John Penn will act until a permanent replacement is found.

The big miners retreated en masse. Newcrest gave up 2 per cent, Fortescue Metals 1.6 per cent, BHP 0.8 per cent and Rio Tinto 0.5 per cent.

Bond proxies dropped as the yield on ten-year Australian bonds bounced. APA Group shed 1.3 per cent, AusNet 1.1 per cent and AGL Energy 0.5 per cent. Charter Hall Group led a sell-off among REITs, falling 3 per cent. Goodman lost 2.8 per cent, Vicinity Centres 1.8 per cent and BWP Trust 1 per cent.

Other markets

Oil rebounded from Friday’s fall. Brent crude rallied 24 cents or 0.4 per cent this morning to US$63.19 a barrel.

Gold stepped back $5.50 or 0.3 per cent to US$1,739.30 an ounce.

The dollar faded 0.3 per cent to 75.98 US cents.

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