Miners drag ASX into red at open; Champion Iron, Pendal sink

3 min read | July 14, 2022 05:55 PM PDT | By Ashish

Miners drag ASX into red at open; Champion Iron, Pendal sink — Image source: ©Ymgerman | Megapixl.com

Highlights

The Australian share market opened lower on Friday.

The ASX 200 index fell 28.50 points or 0.43% to 6,622.10 at the open.

Materials and Financials are the worst performing sectors so far.

The Australian share market opened lower on Friday after Wall Street finished mixed in overnight trade. The ASX 200 index fell 28.50 points or 0.43% to 6,622.10 at the open, dragged down by a fall in shares of BHP Billiton, Rio Tinto and Fortescue after iron ore prices slipped sharply.

The benchmark index continued to slip and fell sharply by 90.10 points or 1.35% to 6,560.50 in the first 10 minutes of trade on Friday. The ASX All Ordinaries index fell 0.391% to 6,821.8, while the A-VIX rose 0.284% to 17.653 at the open. The index has shed 0.84% in the past five days, and 9.73% in the past 52 weeks.

Meanwhile, on Thursday, the benchmark ASX 200 index ended 0.45% higher at 6,650.6 points.

Global equity indices

Global equities closed on a weak note on Thursday after the release of higher-than-expected inflation data, which amplified fears of a possible recession. The June US inflation numbers surged to a 40-year high with consumer prices soaring 9.1% over the last 12 months. The Australian share market is likely to see weakness in commodity stocks on concerns around muted demand.

Additionally, US shares ended on a mixed note on account of muted bank earnings. Meanwhile, jobless claims rose to the highest level since November in the week ended 9 July 2022, according to the government data.

On Wall Street, the Dow Jones declined 0.45%, the S&P 500 dipped 0.3%, and the NASDAQ was flat. The US equity indices were dragged down by weak earnings by banks.

In Europe, the Stoxx 50 fell 1.7%, the FTSE dipped 1.6%, the CAC declined 1.4%, and the DAX ended 1.9% lower. MSCI's gauge of stocks across the globe fell 0.82%.

Also, China's GDP data is scheduled to release later today.

Market action

Speculations about a potential recession are flying thick and fast with traders expecting recession to hit the US economy soon as US Treasury yield curve has become the most inverted currently than it was at any point in time. The yield on 10-year Treasury notes rose to 2.961%. The two-year US Treasury yield fell to 3.134%.

Data Source: ASX (as of 15 July 2022, 10:30 AM AEST)

While Champion Iron (ASX:CIA) and Pendal (ASX:PDL) were the top laggards, WiseTech (ASX:WTC) and Paladin Energy (ASX:PDN) were the top gainers.

Materials (down over 3%) and Financials (down over 1.7%) were the worst performing sectors. On the other hand, the healthcare sector gained over 0.3%

Newsmakers

Rio Tinto has maintained its guidance for iron ore production in range of 320 million to 335 million tonnes in FY22.
AVZ Minerals said that it was in talks with the Congolese government in relation to the grant of a mining licence.
BCI Minerals said that its CEO Alwyn Vorster was expected to exit the business by 2022-end.
Pendal reported a fall in total funds under management (FUM) to AU$111 billion as of 30 June 2022.
WiseTech has raised its FY22 EBITDA guidance to the range of AU$310 million to AU$320 million.

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