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

A month of near-vertical gains gave way to further profit-taking this morning as some investors cashed out.  

A positive start gave way to a third day of losses. The S&P/ASX 200 fell 47 points or 0.7 per cent by mid-session after being up as much as 40 points.

Despite the setback, the benchmark remained firmly on track for its best monthly return in the index's 20-year history. The older All Ordinaries had its sights on its best month since March 1988.

What's driving the market

Record finishes on Wall Street and multi-year peaks in iron ore and copper proved a flimsy defence against institutional selling. The S&P 500 and Nasdaq advanced 0.24 per cent and 0.92 per cent, respectively, on Friday to new closing highs. Iron ore reached a six-year peak. Copper touched its highest level since 2013.

Here, gains in tech stocks, Fortescue Metals, Macquarie Group and Transurban were outweighed by declines across the broader market.

November has been a month to remember, not just here, but around the globe. Financial markets have raced to price in an economic recovery next year as vaccines become widely available.   

"November looks set to be an awesome month for equity investors, with European equities leading the charge at a country/regional level," NAB Currency Strategist Rodrigo Catril said. "The Euro Stoxx 50 index is up almost 20 per cent month to date, the Nikkei is 15 per cent higher and main US equities indices are up between 11 per cent and 13 per cent. US small cap are the big winners with the Russell 200 up 20.6 per cent."

The market mood this morning was not helped by a steady deterioration in US futures. S&P 500 index futures were lately down eight points or 0.2 per cent. Dow futures declined 103 points or 0.3 per cent.

Going up

The winners' list shrank as the morning wore on and one sector after another turned negative. Tech stocks proved most resilient following signs of rotation on Wall Street back to winners from the pandemic. Four of the five WAAAX group of sector leaders advanced. WiseTech gained 1.3 per cent, Afterpay 0.5 per cent, Altium 0.5 per cent and Appen 0.8 per cent. Xero slid 0.6 per cent.

The health sector briefly rallied for the first time in four sessions before giving way to the market rot. Fisher & Paykel Healthcare gained 3.7 per cent and ResMed 0.5 per cent. Market heavyweight CSL faded 0.2 per cent.

In the communication services sector, gains in REA Group +1.3 per cent and SEEK +0.6 per cent helped offset declines in Telstra -1 per cent and TPG Telecom -1.4 per cent.

Risk appetite remained strong at the speculative end of the market. The Emerging Companies Index surged 0.8 per cent to its highest level in nine years.  

Flexigroup rose 2.4 per cent after rebranding as humm under the share code HUM. Rival Z1p Co slid 1 per cent after announcing its Covid-delayed launch in the UK. Chair Philip Crutchfield told shareholders at today's virtual AGM the BNPL player was live with more than 150 UK merchants.

Going down

Most of the index heavyweights rolled over by mid-session. The banks were the biggest drags. CBA and Westpac gave up 1.3 per cent, ANZ 1.2 per cent and NAB 1.2 per cent.

While Fortescue Metals marked iron ore's best price in more than six years with a 0.6 per cent rise to a three-month high, BHP slid 0.9 per cent and Rio Tinto 0.4 per cent.

Gold stocks retreated after the precious metal broke through critical support. Newcrest shed 1.3 per cent, Perseus Mining 5.2 per cent and Ramelius Resources 4.2 per cent.

Adventure sports retailer Kathmandu sank 4.9 per cent after announcing the resignation of CEO Xavier Simonet after five and a half years. Health food specialist Select Harvests dropped 3.7 per cent on news full-year net profit more than halved from $53 million last year to $25 million this year.

Other markets

Asian markets were mixed. China's Shanghai Composite rallied 0.4 per cent. Hong Kong's Hang Seng dropped 0.1 per cent. Japan's Nikkei edged up less than 0.1 per cent.

Oil declined ahead of tonight's OPEC+ meeting. Brent crude dropped 49 cents or 1 per cent to $US47.76 a barrel. Gold eased $3.50 or 0.2 per cent to $US1,784.60 an ounce.

The dollar pushed above 74 US cents for the first time in two months. The Aussie was last trading at 74.02 US cents.

What's hot today and what's not

Hot today: The majority shareholder in ASX-listed advertising and PR company WPP AUNZ (ASX:WPP) hopes to take advantage of the company's Covid-depressed share price. Shares in the Australian operation jumped 34.2 per cent after London-based WPP offered minority shareholders 55 cents per share. The British multinational already owns 61.5 per cent of the Australian listed entity. The board of WPP AUNZ advised shareholders to take no action until independent directors assess the offer.

Not today: Penfolds winemaker Treasury Wine Estates (ASX:TWE) tumbled a hefty 11 per cent at today's open before paring its fall to 7.9 per cent. The company warned it expects Chinese demand to be "extremely limited" after Beijing slapped temporary tariffs of 169.3 per cent on the company's products. Treasury outlined plans to slash costs and redirect its wine to alternative markets. The share price dived 11.25 per cent on Friday when the news first broke.


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