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The share market fell for a fourth day as declines in banking and tech stocks outweighed gains in defensive pockets of the market.

The S&P/ASX 200 pared an early fall of 59 points to 10.5 points or 0.15 per cent by mid-session.

On-going pressure on commodity markets weighed on energy producers. The tech sector slid towards its lowest close since May 2020. Property and healthcare companies attracted haven buying.

What’s driving the market

Rising US equity futures tempted dip-buyers at yesterday’s 15-week low in the ASX 200. Selling resumed today after the overnight action failed to live up to the promise.

“US equities began the NY session with a spring in their step, but as the day progressed the positive vibes faded with the Dow falling for a fourth straight day (-0.26%) while the S&P 500 closed at 0.25% and the NASDAQ was 0.98%,” NAB currency strategist Rodrigo Catril said.

“Lack of positive news and still elevated market volatility (VIX closed at 33) suggest the anaemic equity rebound recorded over the past 24 hours is unlikely to set the start to a positive turnaround.”

The ASX 200 this morning retested the psychologically-significant 7000 technical support level for a second day following overnight pressure on commodity markets. The index dipped as low as 6992 before recovering to 7042.

“Fears of an economic slowdown are also bleeding into the commodity market,” Kunal Sawhney, chief executive of research group Kalkine, said. “Commodity prices seem to be majorly bearing the brunt of China’s zero-COVID policy. Iron ore and oil prices recently took a massive hit on concerns about weaker demand from China amidst lockdown restrictions.”

Canada’s stock benchmark neared a technical correction overnight, down 9.95 per cent from its peak. With its heavy bias towards commodity stocks, the S&P/TSX Composite Index is arguably the closest match among overseas benchmarks to the ASX 200. By comparison, the ASX 200 has declined 7.8 per cent from last year’s all-time high.   

“The Australian benchmark index had a weaker start this morning, weighed down by losses in tech and materials shares,” Kalkine’s Sawhney said. “As traders across the globe prepare for the US inflation data [tonight], investors seem to be dumping riskier assets.

“Investors appear to be worried over a range of global headwinds, including war, rising interest rates, supply-chain concerns, and elevated inflation. Market sentiments also seem to be battered by the latest consumer confidence report from Westpac, which demonstrated a fall in May amidst high inflation and increasing interest rates.”

Westpac’s confidence index slumped 5.6 per cent this month to its lowest level since the pandemic lockdowns of 2020.

“The weakness in this survey is not related to another pandemic shock but to the combination of rising cost of living pressures and the prospect of rising interest rates,” Westpac chief economist Bill Evans said.

“While headline inflation pressures may ease from this point, consumers are aware that the Reserve Bank plans to continue increasing the cash rate for some time.“

Going up

Traders turned to traditional havens as the market mood remained cautious. In the health space, CSL gained 2.28 per cent, Nanosonics 3.68 per cent and ResMed 1.85 per cent.

Lifestyle Communities bounced 10.22 per cent following a trading update. Charter Hall Retail advanced 2.23 per cent, SCA Property 1.94 per cent and Waypoint REIT 1.87 per cent.

Diversified property group GPT climbed 1.39 per cent on news it expects to meet guidance despite an uncertain trading environment. Office leasing markets remained “challenging” in the March quarter, but retail sales continued to improve.

Fund manager Magellan rallied 1.89 per cent after appointing David George as CEO and Managing Director. George was formerly Deputy Chief Investment Officer for public markets at the national sovereign wealth fund, the Future Fund.  

A 20 per cent rebound in full-year net profit to $193 million helped lift CSR 1.49 per cent. The building products manufacturer increased trading revenues by 9 per cent to $2.3 billion. 

Galileo Mining injected some excitement into the moribund speculative end of the market after striking “significant” palladium-platinum-copper-nickel-sulphide mineralisation at its Norseman project. The miner’s shares briefly tripled in value before trimming their advance to 135 per cent.  

Going down

The financial sector was the biggest drag, falling more than 1 per cent as NAB went ex-dividend. The bank’s shares dropped 3.68 per cent. ANZ declined 1.3 per cent, Westpac 0.89 per cent and CBA 0.17 per cent.

Last night’s 1 per cent bounce in the Nasdaq brought little relief for ASX tech investors. Novonix sank 2.23 per cent, Megaport 1.78 per cent and Appen 0.92 per cent.

Other growth stocks to feel the heat included Tyro Payments -2.97 per cent, Zip Co -2.88 per cent and Polynovo -2.79 per cent.

Declines in crude and gold kept the pressure on commodity stocks. Woodside Petroleum slid 1.53 per cent, Newcrest 1.34 per cent and Santos 0.44 per cent.

Investors in GrainCorp locked in profits after the agribusiness reported a record half-year and reaffirmed earnings guidance. Pre-tax earnings tripled to $427 million from $140 million in HY21. Net profit jumped to $246 million from $51 million. The company confirmed its full-year profit forecast of $310-$370 million. The share price eased 2.18 per cent.

Trade in takeover target Link Administration Holdings was briefly paused after the share price plunged 12.68 per cent on heavy volumes. The share price remained depressed when trade resumed, lately down 11.37 per cent after the company said it had no explanation for the decline or volumes.

Other markets

Asian markets overcame early weakness. The Asia Dow put on 0.13 per cent, China’s Shanghai Composite 1.28 per cent, Hong Kong’s Hang Seng 1.1 per cent and Japan’s Nikkei 0.38 per cent.

US futures also rose. S&P 500 futures climbed 17 points or 0.43 per cent.

Oil rallied with this morning’s improvement in risk appetite. Brent crude climbed US$1.54 or 1.5 per cent to US$104 a barrel.

Gold continued to test three-month lows. The yellow metal fell US$5.50 or 0.3 per cent to US$1,835.50 an ounce.

The dollar bounced 0.4 per cent to 69.6 US cents.

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