ASX 200 ends 0.7% lower ahead of Fed meet; inflation jitters also weigh in


  • The ASX 200 ended 52.10 points or 0.70% lower at 7,379.30 on Wednesday.
  • The market sentiments were dented by spike in inflation and extension of curbs in Greater Sydney.
  • Investors turned caution ahead of US Fed meeting outcome.
  • Asian markets hit 7-month low, with Japan’s Nikkei falling 1.5%.
  • Bitcoin price rose 7.5%, followed by others digital currencies such as Ethereum, XRP and Dogecoin.

Australian shares ended lower on Wednesday as spike in inflation and extension of lockdown in Greater Sydney dented market sentiment. The equity market traded cautiously ahead of the Federal Open Market Committee (FOMC) meeting. Market participants are closely tracking the timing of stimulus tapering.

The ASX 200 dropped 52.10 points or 0.70% to settle at 7,379.30.  The surge in selling in blue-chip stocks such as BHP, Rio Tinto, Nickel Mines, Redbubble, Netwealth Group, Polynovo and Pointsbet Holdings dragged the market.

The market breadth, indicating the market's overall strength, was very weak with ten of the 11 sectoral indices ending red. The information technology index was the worst performer with over 1.95% loss, followed by energy which tumbled 1.3%. Among others, telecom, financial, materials, health care, consumer staples and consumer discretionary also ended in negative territory.

The Last Trade || ASX 200 Ends 0.7% Lower Ahead Of Fed Meet; Inflation Jitters Also Weigh

Bucking the trend, A-REIT was the only gainer, closing 1% higher.

Among the individual stocks, investment fund Spark Infrastructure Group (ASX: SKI) emerged as top performer on the ASX pack with 5.2% gain. Some of the other notable gainers were English bank Virgin Money UK PLC (ASX:VUK), automotive retail group Eagers (ASX: APE) and IT firm WiseTech Global Limited (ASX:WTC).

On the losing side, miner Nickel Mines Limited (ASX:NIC) topped the chart with 10.2% loss. Some of the worst performers were online bookmaker PointsBet Holdings Limited (ASX: PBH) and health care firm Polynovo Limited (ASX:PNV).

Here’s how the sectoral indices performed today.   

Image source: Lin Xiu Xiu,

The information technology sector extended loss for the second session, tracking overnight losses in US counterpart NSADAQ.  In the tech space, software firms Nuix and Altium were among top losers. Buy Now Pay Later firms Afterpay, Zip and Sezzle also settled in red.  

Within the banking pack, all the Australia’s big four lenders - Commonwealth Bank of Australia (ASX: CBA), Australia and New Zealand Banking Group (ASX:ANZ), Westpac Banking Corporation (ASX:WBC) and National Australia Bank (ASX:NAB) – were seen lower.   

In the mining sector, index heavyweights BHP Group (ASX:BHP) declined the most, followed by Rio Tinto (ASX:RIO) and Fortescue Metals (ASX:FMG). 

In the yellow metal space, Silver Lake Resources (ASX:SLR) ended higher, snapping two session losing streak. Meanwhile, other gold mining stocks such as St Barbara Limited (ASX:SBM), WestGold Resources (ASX:WGX), Ramelius Resources (ASX:RMS) and Evolution Mining (ASX: EVN) ended in red.

Moving on to the energy space, sectoral leader Woodside Petroleum (ASX: WPL), Beach Energy Limited (ASX:BPT), Santos (ASX:STO) ended in red zone, owing to subdued crude oil price.

Shares in news

Shares of Nickel Mines Limited (ASX:NIC) declined as much as 10.2% after the company reported June quarter earnings. The Company posted a marginal rise of 0.7% in nickel metal production from its Hengjaya Nickel and Ranger Nickel projects, compared to the preceding quarter. The higher realised prices were partly offset by an increase in operating cash costs due to rising thermal and coking coal prices, stated NIC.

Shares of Mader Group Limited (ASX:MAD) rose on robust June quarter earnings. The business support services provider posted a 24% rise in fourth quarter revenue to AU$86.4 million, driven by high demand. The Company said quarterly EBITDA (earnings before interest, taxes, depreciation, and amortization) gained over 36% to AU$11.5 million. 

Tyre maker firm National Tyre & Wheel Limited (ASX:NTD) shares gained after it upgraded its earnings outlook. The Company stated it now expects FY21 operating EBITDA to be AU$35.9 million, up from previous forecast of between AU$31 million and AU$33 million.

Shares of San Francisco-based Life360 Inc (ASX:360) gained following solid business update. The family app has recorded 32.3 million global monthly active users (MAU) for the quarter, up 15% from the prior quarter, driven by viral surge from its teen audience.

Australia's Spark Infrastructure Group (ASX:SKI) jumped as much as 6.9% to AU$2.78. The electricity infrastructure investor said a consortium including private-equity firm KKR & Co has hiked its buyout offer price to AU$2.95 per share, up from previous offer of AU$2.80 apiece. Revised bid price values Spark at AU$5.13 billion and represents a premium of 13.5% to its last close.

Mining and exploration company IGO Limited (ASX:IGO) fell nearly 2% after it shared business update for June quarter. It has completed the 2021 Financial Year (FY21) with strong production and financial results. Production numbers at IGO’s Nova beat guidance.

The share price of Anteotech (ASX:ADO) rose over 2% on signing UK distribution agreement for EuGeni. The company declared today morning that it has signed a Distribution Agreement with Apacor Limited for the distribution of the EuGeni Reader platform and COVID Antigen Rapid Diagnostic Test in the UK.

Shares of the world’s second largest miner BHP Group (ASX: BHP) declined 1.7% to hit a low of AU$52.45. The iron ore miner has made a bid to acquire a high-grade nickel project in Canada.

The share price of global miner Rio Tinto (ASX: RIO) dropped as much as 1.3% to AU$130.78 after it committed funds for the Jadar lithium project. The Anglo-Australian company has proposed to invest AU$2.4 billion in the Jadar lithium-borates project in Serbia, one of the world’s largest greenfield lithium projects.

Shares of automotive retail group Eagers (ASX: APE) surged 5.4% to AU$16.6 post a solid trading update.

Asian markets hit 7-month low

The Asian markets hit seven-month lows on Wednesday as investors turned cautious ahead of the Federal Open Market Committee (FOMC) meeting. Market is closely tracking for clues on interest rates decision and inflation outlook. While no policy changes are expected in Wednesday’s meeting, investors will be looking for information on the timing of stimulus tapering. 

Meanwhile, Chinese authorities’ crackdown on the technology, property and education sectors also weighed on reginal stock markets. China’s Shanghai Composite extended loss for the third session, dropping 0.8%. Hong Kong’s Hang Seng also remained under pressure and was down 0.3%.

Japan’s Nikkei was the worst performer in the region with 1.5%. India’s BSE Sensex was also down 0.6%.

On the same lines, South Korea’s Kospi slipped 0.40%, while Straits Times in Singapore traded lower by 0.2%. 

In the overnight trade on Tuesday, US stocks fell from record highs as caution prevailed in the market ahead of Fed’s policy meeting. The Dow Jones fell 0.25%, while the S&P 500 slipped 0.5%. The tech-savvy NASDAQ Composite ended 1.2% lower. 

Shares of iphone maker Apple ended 1.5% lower ahead of its third quarter results. For the June quarter, the tech major has reported revenue of US$81.4 billion, compared to US$59.7 billion in the year-ago period.  The net profit increased to US$21.7 billion, from $11.25 billion in June quarter of 2020. Revenue stemming from iPhone sales rose to US$39.6 billion, while iPad revenue also climbed to US$7.4 billion. Mac sales revenue grew to US$8.2 billion from US$7.1 billion one year prior.

Cryto markets rebound, Bitcoin jumps 7%

The cryptocurrency market were trading in green during Asian trading hours on Wednesday with major digital currencies such as Bitcoin, Ether, and Dogecoin witnessing surge in buying. The rally in digital coins were attributed to launch of Bitcoin fund today. Canada's largest bitcoin and digital asset fund manager 3iQ Corp officially listed The Bitcoin Fund on Nasdaq Dubai, the region's international exchange.

Bitcoin was trading 7.5% higher at around US$39,750. The world's largest cryptocurrency had briefly surpassed US$40K level in the last 24 hours trade.  

Meanwhile, Ethereum, the world’s second-largest crypto, was up 4.5% at US$2,288, while XRP rose 2.6% to 64 US cents. Meme-based currency Dogecoin traded higher by 2.3% at 20.5 US cents. The price of other digital currencies such as Cardano and Litecoin were also flashing in green. 





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