Join our daily newsletter At The Bell to receive exclusive market insights
The share market tilted towards its fifth loss in six sessions after a dour Wall Street session trampled over yesterday’s green shoots and Westpac was slammed with the largest civil fine in Australian history.
The S&P/ASX 200 trimmed a 99-point opening fall to 58 points or 1 per cent by mid-session, erasing more than a third of yesterday’s 140-point rebound. In a mirror image of yesterday’s action, all 11 sectors retreated.
What’s driving the market
Wall Street extended its September sell-off overnight, setting new lows for the month. The S&P 500 dived 2.37 per cent to its weakest close since late July. The index has fallen 7.5 per cent this month after a correction in technology stocks deepened into a broader pullback. The Nasdaq dropped 2.73 per cent last night and has lost almost 10 per cent during September.
“Rather than there being a particular catalyst for the renewed decline in US equities… we could cite numerous ongoing background influences. These include: rising US Covid-19 infection rates; no evidence of progress on a fiscal support bill to replace the CARES Act; and, the mere proximity to the 3 November US elections,” NAB Head of FX Strategy Ray Attrill said.
The financial sector declined 0.7 per cent after Westpac agreed to a $1.3 billion penalty for breaches of anti-money laundering legislation. AUSTRAC called the fine “the largest ever civil penalty in Australian history”. The bank’s shares dropped 0.8 per cent to their lowest level since May. CBA gave up 0.9 per cent, ANZ 0.5 per cent and NAB 0.2 per cent.
Going up
Barely one in six stocks resisted the downtrend. A 3.5 per cent bounce in asset manager Janus Henderson was the index’s biggest rise. Property group Abacus gained 3.4 per cent, investment manager Challenger gained 2.8 per cent, asset manager Pendal Group 2.6 per cent and Seven Group Holdings 2 per cent.
Outdoor apparel retailer Kathmandu jumped 5.6 per cent, reversing much of yesterday’s post-earnings retreat. Toll road operator Transurban was the only company on the ASX 20 index of market heavyweights to advance, rising 0.2 per cent.
A handful of recovery plays extended yesterday’s gains. Webjet put on 1.3 per cent, Flight Centre 0.9 per cent and Treasury Wine Estate 0.6 per cent.
Going down
The technology sector copped the biggest blow, falling 1.9 per cent. Afterpay shed 5 per cent after announcing Luke Bortoli was stepping down as Chief Financial Officer.
A two-month low in gold dragged Perseus Mining down 5.6 per cent, Evolution Mining 5.1 per cent and Newcrest 4 per cent. An on-ongoing retreat in iron ore prices helped lower BHP by 0.8 per cent, Rio Tinto by 0.6 per cent and Fortescue by 0.4 per cent.
Outside of the tech and mining space, insurer IAG fell 1.5 per cent, Telstra 1.1 per cent, Woolworths 0.9 per cent, Wesfarmers 0.7 per cent and CSL 0.4 per cent.
Other markets
A gloomy morning on Asian markets saw China’s Shanghai Composite fall 1 per cent, Hong Kong’s Hang Seng 1.5 per cent and Japan’s Nikkei 0.6 per cent. S&P 500 index futures were down a point or less than 0.1 per cent.
Oil resisted the cold winds buffeting commodity markets overnight, but succumbed this morning. Brent crude eased 32 cents or 0.8 per cent to $US41.45 a barrel. Gold declined $3.80 or 0.2 per cent to $US1,864.60 an ounce.
The dollar faded 0.1 per cent to 70.57 US cents.
What’s hot today and what’s not
Hot today: Explorer Tao Commodities (ASX:TAO) bolted to its highest level in more than two years upon news it had entered into an option to secure a titanium and zircon mineral sands project in the US. Tao will acquire Hyperion Metals, which owns the 2,100-acre Titan Project in Tennessee. The project is located just 15km from a pigment plant that is a major consumer of titanium. Tao shares were last up 83.3 per cent at 22 cents.
Not today: Lithium miners suffered heavy losses after Tesla CEO Elon Musk said the electric car maker “might get into the business of mining minerals used in electric vehicle batteries”. Musk also announced Tesla had secured the rights to a lithium deposit in Nevada. Here, battery materials supplier Novonix (ASX:NVX) dived 15.8 per cent, Galaxy Resources (ASX:GXY) 8.1 per cent and Pilbara Minerals (ASX:PLS) 4.4 per cent.
