Australian sharemarket has its worst week in February so far, resources stocks sold off
The ASX had its worst week this month so far following negative leads from overseas markets, with resources stocks leading the sell-off.
The S&P/ASX200 closed 1.34 per cent lower at 6793.8 while the All Ordinaries Index dropped 1.28 per cent to 7064.
Ord Minnett said US sharemarket falls overnight were triggered by an unexpected rise in initial jobless claims, which raised questions over the robustness of the labour market recovery in the world’s largest economy.
European stocks also slumped amid a batch of soft earnings results and fears of a commodity price driven rise in inflation, the wealth management group said.
CommSec analyst Steve Daghlian said losses on the local bourse were broad-based.
While February had been strong after four straight months of gains on the ASX, this week’s losses were the worst this month so far, Mr Daghlian said.
OpenMarkets Group chief executive Ivan Tchourilov said commodity and material stocks led the sell-off.
“Downside momentum has picked up throughout the day,” Mr Tchourilov said.
“Investors are digesting a lot of the reports that have come out this week and are taking a good look at how their portfolios are constructed off the back of that.
“Market euphoria around BHP, Rio and FMG announcing record dividends appears to have been short-lived with all three coming under significant selling pressure today.”
Rio Tinto shed 3.33 per cent to $123.26, BHP fell 2.45 per cent to $47.32 and Fortescue sank 3.66 per cent to $23.97.
QBE reported booked a previously flagged full year statutory net loss of $US1.5bn ($A1.95bn), compared with a net profit of $US550m ($A707m) in 2019, attributing the result to factors including a disappointing underwriting result.
Ord Minnett noted QBE experienced strong premium rate increases globally, with average hikes of 9.8 per cent.
Shares in QBE lifted 3.1 per cent to $8.99.
Hearing implant pioneer Cochlear reported a 50 per cent surge in half year statutory net profit to $236.2m, saying surgeries were back to pre-COVID-19 levels in most countries.
On an underlying basis, however, which excludes one‐off items such as innovation funds and government assistance, net profit was down 6 per cent at $125.3m.
Shares in Cochlear gained 8.4 per cent at $221.68.
Poultry producer Inghams Group rose 3.59 per cent to $3.75 after booking a near 35 per cent surge in half year statutory net profit to $35.3m, saying overall trading volumes had returned to pre COVID-19 levels as demand for chicken and turkey remained resilient.
Commercial and industrial property company Goodman Group posted a 16 per cent rise in operating profit, which includes adjustments such as property valuation changes, to just shy of $615m.
Chief executive Greg Goodman said the logistics and warehousing sectors were playing a big role globally in providing essential infrastructure to the digital economy, with global online sales increasing on average by 30 per cent last year.
Goodman Group shares added 1.35 per cent to $17.22.
Waste management company Cleanaway reported a 75.3 per cent leap in first half net profit to $79.4m, saying the rebuild of the burnt-down Perth Material Recycling Facility was well advanced and would finally recommence operations in the June quarter.
Its shares, however, dipped 3.42 per cent to $2.26.
Embattled casino giant Crown Resorts advanced 5.34 per cent to $10.25, with Macquarie Research saying it now assumed gaming operations at Crown Sydney would open in early 2022 “considering a constructive relationship between the NSW regulator” and the company.
Credit Suisse recently gave a similar estimate of December this year.
Meanwhile, NSW gaming regulator Philip Crawford told ABC’s 7.30 he was in talks with Crown’s executive chair Helen Coonan, urging the departures of board directors Harold Mitchell and John Poynton following the recent exodus of other key executives in the wake of the damning Bergin inquiry findings.
“I would think that they both need to go,” Mr Crawford said.
With a fresh inquiry in WA now on foot, Premier Mark McGowan refused to comment on Perth-based Mr Poynton.
“I’m not going to assassinate anyone’s character. Let’s just let it run its course,” Mr McGowan told reporters.
ANZ inched 0.23 per cent higher to $26.61, Commonwealth Bank gave up 1.33 per cent to $82.51, National Australia Bank backtracked 1.65 per cent to $25.11 and Westpac erased 1.15 per cent to $24.09.
The Aussie dollar was buying 77.87 US cents, 55.71 British pence and 64.34 Euro cents in afternoon trade.