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The share market spiralled towards a seventh straight loss as a collapse in iron ore and coal prices added to down-pressures

The S&P/ASX 200‘s grim run of losses continued with a fall of 45 points or 0.7 per cent.

The market traded in and out of positive territory for the first hour before slumping as iron ore shed more than 9 per cent in Chinese trade.  

Heavy falls in miners and energy producers quickly outpaced gains in banking, property and healthcare stocks.

What’s driving the market

Buyers sat on their hands after two weeks of heavy selling knocked 764 points or 10.6 per cent off the ASX 200. A market holiday tonight in the US capped trading volumes. Sinking commodity prices added to concerns.

Commodities ended the week on a dour note amid ongoing concerns of a slowdown in economic activity. Sentiment remains bearish as central banks double down on their efforts to tame inflation with tighter monetary policy,” ANZ’s senior commodity strategist Daniel Hynes said.

Iron ore fell to a six-month low at the end of last week. Copper had its worst week since October. Crude oil lost almost 10 per cent for the week.

The selling in iron ore intensified this morning. Futures on China’s Dalian Commodity Exchange were lately down 9.6 per cent after earlier falling 10 per cent. Coal and steel prices also fell sharply.

The falls helped drive the dollar back under 70 US cents. The Aussie was lately trading at 69.42 US cents.

This morning’s fall put the ASX 200 on track for a fresh 19-month closing low. Buying interest has collapsed as a coordinated central bank war on inflation threatens to tip the global economy into recession.

Commodity pressure overshadowed a better end to a challenging week on Wall Street. The S&P 500 bounced 0.22 per cent on Friday. Europe’s Stoxx 600 index edged up almost 0.1 per cent.

“US and European equities showed sign of stabilisation on Friday, but still ended with sharp declines on the week. Sentiment was not helped after Fed Chair Powell said the Fed has unconditional commitment to restoring price stability,” NAB currency strategist Rodrigo Catril said.

Going up

The heavyweight banks pared two weeks of sharp losses. CBA bounced 1.29 per cent from a 14-month low. ANZ firmed 1.23 per cent, NAB 0.42 per cent and Westpac 0.26 per cent.

Transurban bounced 1.61 per cent on news shareholders will receive a distribution of 26 cents per share for the six months to June 30.

Other heavyweights to advance included Wesfarmers +2.5 per cent, CSL +2.25 per cent and Telstra +1.45 per cent.

An earnings upgrade from retail property giant Vicinity Centres helped lift the REIT sector off a 19-month low. Shares in the shopping centre operator firmed 4.6 per cent after it raised its full-year outlook for funds from operations.

HomeCo bounced 4.11 per cent, Growthpoint Property 3.89 per cent and Scentre Group 3.41 per cent. Shopping Centres Australasia gained 1.49 per cent after acquiring five neighbourhood shopping centres from Primewest for $180 million.

A cash injection from a new investor lifted PointsBet 10.47 per cent. Financial trading firm SIG Sports Investment paid $94.2 million for 38,750,000 PBH shares at a premium to recent prices. The 12.8 per cent stake makes SIG the largest shareholder in the gaming group.

The battle for control of Infomedia hotted up with a third suitor entering the fray. Shares in the automotive software-as-a-service provider jumped 7.38 per cent to $1.60 after Solera Holdings offered $1.70 per share. The company was already weighing conditional non-binding indicative proposals from Battery Ventures and a consortium led by TA Associates.

Going down

Bulk metal miners fell as iron ore tanked this morning. Fortescue Metals slumped 7.15 per cent. Rio Tinto shed 4.87 per cent. BHP gave up 4.77 per cent.

Further down the food chain, Chalice Mining shed 9.51 per cent, Champion Iron 9.45 per cent and Whitehaven Coal 9 per cent. Stanmore Resources sank 12.86 per cent.

Energy producers also came under the pump as Brent crude added to Friday’s sharp loss. Brent futures were lately down 54 cents or 0.5 per cent at US$112.58 a barrel.

Beach Energy sagged 7.54 per cent, Santos 4.75 per cent and Woodside 4.54 per cent. Paladin Energy lost 9.62 per cent. Karoon Energy trimmed an opening double-digit dive to a loss of 5.59 per cent.

APA Group eased 1.42 per cent after inking a deal to build and operate a 20km gas link between the Hunter Valley and an existing pipeline to Sydney. APA will own and operate the Kurri Kurri Lateral to the Hunter Power Project, as well as a gas storage facility.

A downgrade from UBS helped push Bega Cheese down 7.93 per cent. The broker cut its 2023 earnings forecast, citing increased cost pressures.

Shipbuilder Austal dipped 0.94 per cent after winning contracts worth more than $300 million from the Royal Australian Navy, United States Navy and Government of Trinidad and Tobago.

Other markets

Asian markets faded steadily. The Asia Dow dropped 0.49 per cent, China’s Shanghai Composite 0.54 per cent, Hong Kong’s Hang Seng 0.84 per cent and Japan’s Nikkei 1.33 per cent.

US futures drifted lower ahead of tonight’s market holiday. S&P 500 futures declined seven points or 0.2 per cent.

Gold eased US$1.90 or 0.1 per cent to US$1,838.70 an ounce.

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