ASX 200 extends fall, drops 0.90% at open; banks rebound

Highlights

• Australian equities opened lower on Friday following disappointing performance of Wall Street indices overnight.
• Losses in the market were led by resources stocks while shares of “Big Four” banks witnessed some rebound.
• On Thursday, the benchmark index S&P/ASX200 closed 1.42% lower at 7,019.70 points.

Australian share market opened lower on Friday (10 June 2022), extending Thursday’s sell-off, as investors' sentiment turned sour following weak closing of Wall Street and European indices. The benchmark ASX 200 index was down 0.90% at 6,956.40 points in the initial few minutes of trading today. The ASX All Ordinaries index was 0.69% lower at 7,190.5 points. 

 On Thursday, the S&P/ASX200 declined sharply to close 1.42% lower at 7,019.70 points. All other sectors closed in the red yesterday except for the energy sector. 

All three US indices fared poorly for the second day in a row yesterday as investors awaited key data on US consumer price index for May. US stocks traded lower Thursday after the European Central Bank (ECB) unveiled its plan to raise rates in July. The ECB said Thursday that it would increase its interest rate from minus 0.5% to zero or higher by September, also indicating a further hike after that. This announcement resulted in the stocks falling in both the US and Europe. 

The S&P 500 slipped 2.38% at 4,017.82 points, the tech-heavy Nasdaq Composite Index fell 2.75% to 11,754.23 points, while the Dow Jones Industrial Average ended 1.94% lower at 32,272.79 points. The Stoxx Europe 600 dropped almost 1.36% at 434.38 points. 

Meanwhile, today is an important day for the US markets as inflation data for May will be released. This will likely give investors some clues about the pace of the Fed's interest rate increase for this year. Noticeably, the Federal Reserve's June meeting is expected to take place next week, when the US central bank is likely to increase key interest rate by half a percentage point. 

On the sectoral front, except for the healthcare sector, all the other ten sectors were in the red today. Utilities, Materials, Information Technology, and Energy, along with other sectors, led losses in the broader market. The domestic mining and energy stocks are impacted by a drop in commodity prices following announcement of fresh lockdown measures in China. Oil prices also dipped marginally. Meanwhile, Gold prices fell after a firmer dollar, and elevated Treasury yields dimmed bullion's appeal.

Meanwhile, banking stocks, which were the biggest hit in yesterday’s trade, witnessed some rebound today. Shares of the “Big Four” banks rose between 1-2.2% following a sharp sell-off earlier this week.

Market Action: 

Coming to the top ASX 200 gainers, Polynovo Limited (ASX:PNV), Mesoblast Ltd. (ASX:MSB), and Westpac Banking Corporation (ASX:WBC) were leading the pack with 2.586%, 1.923%, and 1.653% gains, respectively. On the flip side, Alumina Limited (ASX:AWC), and Sims Ltd. (ASX:SGM) were the top losers, falling 6.516% and 5.258%, respectively.  

Read More: Chimeric (ASX:CHM) boosts financial footing, enters $30M placement agreement with L1

Newsmakers:

AGL Energy Limited (ASX:AGL):

The shares of ASX-listed integrated energy company AGL Energy Limited grabbed the limelight on Friday (10 June) after the company revealed that it has extended the outage at its Loy Yang A coal power plant in by at least six weeks as it was unable to secure equipment needed to repair an electrical fault.  

Atlas Arteria (ASX:ALX):  

Atlas Arteria shares were on investors' radar on Friday (10 June) after the toll road operator announced that it has not received any proposal from IFM Global Infrastructure Fund (IFM) to acquire additional securities in Atlas Arteria. 

Atlas informed that it received a request from IFM for access to certain information, including nonpublic and confidential information about the company and its assets, to develop a formal proposal. However, Atlas Arteria Boards have decided not to provide nonpublic information at this time, said the announcement.   

Read More: Why MP1, LOV, 5EA jumped yesterday despite weak market