The bleeding continued on Australian markets, shares taking a triple-digit hit for a second day as hopes for a US-China trade deal faded.
The ASX 200 crumbled 122 points to an eight-week low before paring its loss to 110 points or 1.6 per cent mid-session at 6602. The dive followed a third night of losses in the US after President Donald Trump doused expectations a deal with China was imminent. Trump told reporters he had no deadline and would be willing to wait until after next year’s November election for the right deal. The S&P 500 shed 0.66 per cent.
The local market has been hit hard by this week’s developments, tumbling more than 270 points in two bruising sessions as the dollar jumped almost a cent and a half, denting exporters. Australia is seen as heavily dependent on Chinese growth through export demand.
Companies trading at record highs last week were ripe for profit-taking. Supermarkets Coles and Woolworths both fell more than 2 per cent for a second day. Fortescue Metals shed 2.7 per cent, Macquarie Group 1.9 per cent, Cochlear 1.7 per cent and CSL 0.6 per cent.
Also hit hard were companies exposed to Chinese appetite for raw materials. BHP dived 2.7 per cent, Rio Tinto 2.5 per cent and Sandfire Resources 3.1 per cent.
Afterpay slid 4.9 per cent to a three-week low at $28.99 after raising funds through a private placement at $28.50 a share. The high-flying tech sector was again in the firing line, retreating another 1.8 per cent from last week’s record high.
The banks continued to probe multi-month lows. ANZ sagged 2.3 per cent to early-January levels. Westpac dropped 0.9 per cent to where it traded last Christmas. NAB and CBA both fell 1.8 per cent.
Gold stocks provided a haven, the local sub-sector rising 0.6 per cent. Gold Road Resources gained 7.6 per cent after upgrading the size of its resources. Resolute edged up 1.5 per cent, Newcrest 1.2 per cent and St Barbara 1.4 per cent.
Retailer Adairs jumped 19.4 per cent after buying Kiwi online furniture seller Mocka for $75.5 million. Junior explorer Hot Chilli surged 14.7 per cent on what the company headlined “one of the best global drill results of 2019”.
The market clawed back a portion of its losses following a mixed GDP report. Third-quarter growth missed expectations, coming in at 0.4 per cent, versus the anticipated 0.5 per cent. However, revisions to previous quarters helped bump the annual rate up to 1.7 per cent from 1.4 per cent at the end of the June. The dollar dipped a fifth of a cent to 68.34 US cents.
China’s Shanghai Composite dropped 0.3 per cent, Hong
Kong’s Hang Seng 0.8 per cent and Japan’s Nikkei 1.1 per cent. S&P 500 index
futures were recently ahead two points or less than 0.1 per cent.
Brent crude futures kicked higher ahead of an OPEC meeting, rising 32 cents or 0.5 per cent this morning to $US61.14 a barrel. Gold dipped $1.50 or 0.1 per cent to $US1,482.90 an ounce.
What’s hot today and what’s not:
Hot today: Ooh!Media was the index’s best performer after the outdoor advertising company raised its earnings outlook. A pick-up in advertising bookings during September and into the final quarter helped the company lift its calendar-year guidance from a range of $125 – $135 million to $138 – $143 million. The company will release its full-year results in February. Shares soared 19.3 per cent.
Not today: 2019 has been a year to forget for shareholders in oil and gas explorer Australis. Shares that traded at 36 cents in February hit a record low 8.7 cents this morning after the company revealed drilling problems at its Tuscaloosa Marine Shale project in the US. Production at the sixth of ten planned wells fell short of expectations. Shareholders appeared to lose patience at the latest setback, sending the share price down 25 per cent.