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ASX Today: ASX caps off worst week since GFC with more losses

A choppy week faded towards a downbeat conclusion as declines in mining and technology stocks outweighed advances in oil companies and banks.

After two weeks of stimulus-fuelled fireworks, the S&P/ASX 200 stalled at seven-month high on Monday, then faded for the remainder of the week. The index eased 15 points or 0.2 per cent this morning to 6160, roughly 20 points below where it started the week.

What's driving the market

The ASX never moved out of first gear today, trading in a tight 36-point range following modest gains on Wall Street overnight. The S&P 500 edged up 0.52 per cent ahead of the last presidential debate between Donald Trump and Democrat rival Joe Biden. A US market desperate for stimulus news seized on a comment by Democrat House Speaker Nancy Pelosi that a deal was "just about there".

US index futures drifted lower as a poorly-received after-market update from Intel offset news US regulators approved Gilead Sciences' remdesivir as a treatment for Covid-19. Intel shares tanked 9.4 per cent in after-hours trade. Gilead shares surged 7.1 per cent. S&P 500 index futures were recently off three points or 0.1 per cent.

Trump and Biden sparred early in their debate over the pandemic outlook. Biden warned of a "dark winter" and accused the president of having "no clear plan". Trump painted a brighter future: "We're opening up our country, we've learned and studied and understand the disease."

Going up

Energy was the pick of the local sectors but never threatened to match a 4.2 per cent surge in the US sector overnight. Santos climbed 3.4 per cent, Oil Search 2.5 per cent, and Woodside 1.2 per cent.

The financial sector shrugged off news NAB's second-half result will take a $642 million hit from provisions and impairments. The bank's shares edged up 0.6 per cent. CBA gained 0.3 per cent, ANZ 1.3 per cent and Westpac 0.8 per cent.

An earnings upgrade fired steelmaker Bluescope up 11.7 per cent to its highest level in two years. The company expects a 30 per cent increase in first-half underlying earnings before interest and tax to around $340 million. MD and CEO Mark Vassella said steel spreads had improved and demand in most markets was "robust".

Qantas rose 1.9 per cent to a four-month peak after CEO Alan Joyce talked up the possibility of state borders re-opening and outlined steps the airline has taken to weather the Covid downturn. Joyce warned revenues would be "significantly lower for some time" and told shareholders "the only antidote when you're faced with less revenue is to lower your costs". Travel agent Webjet climbed 2.8 per cent following a broker upgrade from Morgan Stanley.

Insurer QBE climbed 1.5 per cent on news Richard Pryce will take over from Chair Mike Wilkins as Interim Group Chief Executive while a search for a permanent replacement continues. Rival IAG eased 2.5 per cent after retiring Managing Director and CEO Peter Harmer told shareholders the insurer had benefitted from low incidence of "natural peril events" last quarter.

Going down

Goldminer Newcrest led a retreat in resource stocks following overnight weakness in precious metals and copper. Newcrest sank 2.8 per cent, BHP 1.6 per cent, Rio Tinto 1.1 per cent and Fortescue 0.7 per cent.

Other major drags on the index included Coles -1.9 per cent, Brambles -1.3 per cent and CSL -0.7 per cent.

Link Administration Holdings dipped 1 per cent after the fintech rejected a takeover offer from a consortium of private equity players. The company's board said the proposal "materially undervalues Link Group on a control basis and is not in the best interests of shareholders".

 Other markets

In Asia, China's Shanghai Composite dropped 0.1 per cent and Hong Kong's Hang Seng 0.4 per cent. Japan's Nikkei was barely changed at +0.03 per cent.

A flat morning on commodity markets saw Brent crude inch up a cent or less than 0.1 per cent to $US42.47 a barrel and gold add 50 cents or less than 0.1 per cent to $US1,905.10 an ounce.

The dollar turned lower, easing 0.05 per cent to 71.23 US cents.

What's hot today and what's not:

Hot today: A busy week for new listings continued with one of the most hotly anticipated floats of the year. A day after online furniture retailer Mydeal.com.au (ASX:MYD) almost doubled in value on its first day on the boards, investors in Adore Beauty (ASX:ABY) could be forgiven for suffering mild disappointment as the online make-up retailer edged up a modest 2.5 per cent in its first hour as a listed entity. The float was keenly priced at 3.9 times forecast earnings for this calendar year. Another new arrival, healthcare manufacturer CleanSpace (ASX:CSX), fared better, jumping 47.4 per cent.

Not today: Regis Resources (ASX:RRL) slid 4.4 per cent to a five-month low after Managing Director Jim Beyer reaffirmed guidance but warned the financial year got off to a soft start. "The slower start to our production year does create early pressure," Beyer said. Elsewhere in the gold space, Resolute Mining fell 4 per cent, Saracen Mineral 3.6 per cent and Perseus 3.2 per cent.


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