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The share market fell for only the second time in eleven sessions as declines in commodity stocks overshadowed well-received trading updates from ANZ, Coles and Fortescue Metals.

The S&P/ASX 200 dropped 23 points or 0.3 per cent by mid-session.

Positive earnings updates helped cushion falls among energy stocks and miners amid pressure on crude, iron ore and base metals.

What’s driving the market

Markets across the Asia-Pacific declined after the Dow and S&P 500 retreated from record territory. The Dow slid 0.74 per cent as a dip in long-term interest rates weighed on cyclical sectors. The S&P 500 gave up 0.51 per cent.

The Asia Dow shed 0.14 per cent, China’s Shanghai Composite 0.32 per cent, Hong Kong’s Hang Seng 0.12 per cent and Japan’s Nikkei 1.07 per cent.

Energy and metals miners led the ASX’s retreat as Chinese attempts to rein in coal prices sent shudders through commodity markets.

“China’s plan to limit coal prices sparked a selloff across the commodity complex,” ANZ senior commodity strategist Daniel Hynes said. “Aluminium prices plunged as concerns of supply disruptions due to energy shortages eased,” he added.

Iron ore futures fell as expectations of further constraints on Chinese steel production increased.”

The ASX 200 has risen steadily amid largely supportive outlooks from corporate chiefs during this annual general meeting and quarterly reporting season. A loss today would be only the second since the middle of the month. The index remained on track for a fourth straight weekly advance.

Going up

A 65 per cent increase in full-year cash net profit powered ANZ to a two-month high. The bank declared a cash profit of $6.198 billion after reversing part of the Covid provisions made the previous year.

Retail and commercial lending increased, but second-half volumes in home lending were impacted by strong competition. This year’s dividends of $1.42 are more than twice last year’s Covid-affected 60 cents. Shares in the bank climbed 0.85 per cent.

CBA inched up 0.1 per cent, NAB 0.17 per cent and Westpac 0.98 per cent.

Fortescue Metals climbed 0.43 per cent after shipping 45.6 million tonnes of iron ore in Q1, a record for a first quarter. CEO Elizabeth Gaines said the company’s diversification strategy gained momentum with plans to develop a renewable energy and green hydrogen manufacturing centre in Queensland.  

Coles bounced 0.35 per cent upon reporting a 1.8 per cent increase in supermarket sales last quarter. Liquor sales increased by 2.6 per cent. The company incurred additional costs related to Covid of $75 million.

Newcrest gained 0.44 per cent despite a 21 per cent decline in gold production last quarter. Production was affected by planned maintenance activity. Managing Director and CEO Sandeep Biswas said the result was “in line with our expectations”.

Takeover target Australian Pharmaceutical Industries gained 0.33 per cent after reporting a 0.4 per cent dip in full-year revenues. Net profit was a slender $1.1 million as lockdowns dented the pharmacy wholesaler’s retail business. The company’s share price has been inflated by a two-way bidding war between Wesfarmers and Sigma Health.

Boral was the morning’s best performer, rising 4.35 per cent after CEO Zlatko Todorcevski told today’s AGM the earnings hit from Covid lockdowns and disruption was smaller than expected. The actual earnings impact of increased costs and lower volumes was $33 million, below the $50 million previously flagged.

Post-lockdown signs of improvement this month helped lift JB Hi-Fi 2.45 per cent despite a slow start to the financial year. Australian sales were 7.9 per cent lower than last year, due to lockdowns. CEO Terry Smart said sales momentum picked up this month as NSW reopened.

Going down

Coal miners slumped after Chinese prices traded limit down yesterday following a government crackdown on hoarding and speculation. Whitehaven Coal dived 7.07 per cent to a near two-month low. New Hope shed 2.58 per cent.  

Alumina sank 3.32 per cent after aluminium hit a two-month low in Shanghai. The metal slumped 5.4 per cent on the London Metal Exchange overnight.

Woodside Petroleum slid 2.06 per cent, Rio Tinto 0.89 per cent and BHP 0.58 per cent. Other heavyweight drags included Afterpay -2.18 per cent, Goodman -0.76 per cent and Macquarie Group -0.59 per cent.

Investment manager IOOF fell 7.41 per cent after reporting net outflows last quarter of $0.9 billion in funds under administration and $1.4 billion in funds under management.

Gaming company PointsBet dived 17.8 per cent after reporting a quarterly loss of $26.5 million. Customer receipts of $72.4 million were outweighed by staffing, operating and marketing costs.   

Other markets

US futures shrugged off Asian declines. S&P 500 futures firmed seven points or 0.15 per cent.

Oil added to overnight losses. Brent crude sagged $US1.47 or 1.75 per cent to US$82.40 a barrel.

Gold retraced US$1.60 or 0.1 per cent to US$1,797.20 an ounce.

The dollar retreated 0.14 per cent to 74.89 US cents.

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