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A joyless morning for BHP and the health and tech sectors dragged the ASX off a four-month high following a mixed session on Wall Street and a record rise in coronavirus cases in Victoria.
The S&P/ASX 200 sank 65 points or 1.1 per cent, reversing almost half of yesterday’s 155-point surge.
Yesterday’s roosters – health and tech – were this morning’s feather dusters following a rotation session in the US that saw traders dump momentum stocks for value plays. While the S&P 500 edged up five points or 0.17 per cent, the Nasdaq slumped 87 points or 0.81 per cent, positioning our tech sector for a negative open. The sector fell 2.1 per cent from yesterday’s all-time high as traders booked profits in WiseTech -4 per cent, Afterpay -2.8 per cent and Nanosonics -2.3 per cent.
The health sector fared worse yet, exorcising most of yesterday’s bull charge with a fall of 2.7 per cent. Mesoblast and Pro Medicus were the index’s worst performers, sliding 7.2 per cent and 5.9 per cent, respectively. CSL shed 3.2 per cent, Cochlear 3.1 per cent and ResMed 2 per cent. The declines came despite late-morning news of 484 new COVID-19 cases in Victoria, the biggest single-day increase since the start of the pandemic.
BHP was the other major drag, falling 3.4 per cent a day after a downbeat business update. The big four banks shed between 0.6 and 0.8 per cent.
Energy was the only sector to advance, rising 1.8 per cent after oil prices lifted on news of a European Union stimulus package. Brent crude put on $1 or 2.4 per cent overnight, but gave back 35 cents or 0.8 per cent this morning to trade at $US43.97 a barrel.
Beach Energy led the sector advance, rising 4.7 per cent after increasing full-year oil production by 27 per cent despite the impact of COVID-19. Woodside gained 2.5 per cent, Santos 3.2 per cent and Oil Search 1.9 per cent.
Goldminer Resolute was the pick of companies reporting quarterly earnings, jumping 11.3 per cent to a 21-month high after boosting Q4 production by 37 per cent over the same period last year. Oz Minerals tacked on 2.7 per cent following an upgrade to its full-year outlook.
QBE gained 1.6 per cent as buyers identified positives in news the insurer expects a COVID-19 hit of around $600 million to pre-tax earnings. Baby goods retailer Baby Bunting advanced 7 per cent to its strongest level since February after strong online sales helped the company lift its pro forma net profit after tax by up to 35 per cent.
Retail sales increased for a second month as more businesses returned to full-time trade. Preliminary June figures indicate turnover improved a seasonally-adjusted 2.4 per cent on the month before. Food and clothing were the biggest contributors to the increase.
Asian markets were mixed. China’s Shanghai Composite rose 0.9 per cent and Hong Kong’s Hang Seng 0.4 per cent. Japan’s Nikkei shed 0.3 per cent. S&P 500 index futures rose 13 points or 0.4 per cent.
Gold extended a nine-year high. The precious metal put on $15.10 or 0.8 per cent this morning at $US1,859 an ounce.
The dollar edged up 0.14 per cent to 71.37 US cents after hitting a 15-month high overnight near 71.5 cents.
What’s hot today and what’s not:
Hot today: A six-year high in silver lit a fire under ASX-listed producers and explorers. Silver Mines (ASX:SVL) jumped 18.5 per cent to a level last seen in April 2017. Investigator Resources (ASX:IVR) gained 9.7 per cent, Azure Minerals (ASX:AZS) 12.1 per cent, Equus (ASX:EQE) 8.3 per cent and Adriatic Metals (ASX:ADT) 5.6 per cent. Silver soared 6.8 per cent overnight to its highest level since 2014.
Not today: A trading hazard for the inexperienced is the danger of sharp reversals in dual-listed companies when overseas buyers fail to match local enthusiasm. Traders who held biotech Immuron (ASX:IMC) overnight following yesterday’s 250 per cent ASX bull run woke up to news the company’s US listing gained a comparatively tepid 42.3 per cent. The result for Australian buyers was a 29.2 per cent tumble this morning to 60.5 cents – a substantial premium to Monday’s close of 24.5 cents, but a long way from yesterday’s high of 95 cents.
