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Highlights
- ASX 200 closed 0.64% lower, pulled down by energy and material sector stocks.
- A-REIT remained the top gaining sector on ASX, while Paladin Energy and Champion Iron plunged.
- Global growth concerns, possible rate hikes by central banks and recessionary fears gripped investors.
ASX 200 closed lower for a seventh consecutive session today, dropping 0.64%, to 6433.40 points. The Australian benchmark index was majorly pulled down by the energy and materials stocks. The sectors were suffering from a commodity prices crunch due to global growth concerns. As a result, the ASX 200 hit a new 100-day low. Over the last five days, the index has lost 7.19%.
How were sectors and indices placed?
While the index hit a new 100-day low, seven of 11 sectors ended higher. A-REIT was the best performer, rebounding from recent lows to gain 3.79% by market close. The biggest loser was energy sector, down 5.27%.
The Volatility indicator- A-VIX index also closed sharply lower, down 1.68%. The All-Ordinaries index was 0.807% lower. Large cap stocks were also down as illustrative ASX 50 Index (XFL) dropped by 0.689%. In line the Midcap index ASX Midcap 50 (XMD) lost 0.183% and the ASX Small Ordinaries index (XSO) was down 0.948%.
Top gainers and losers
Source © 2022 Kalkine Media ®, ASX website
Paladin Energy lost 13.08% followed by Champion Iron plunging 11.9%. The shares seemed to be affected by related sectoral and commodity blues. Top gainer of the day was Pointsbet Holdings, up 18.60%. Following the lead were Appen Limited from technology sector and Pinnacle Investments from financials.
Newsmakers of the day
- APA Group (ASX:APA) signed a Gas Transportation and Storage Agreement with Snowy Hydro for a term of 30 years. The deal comes in light after APA‘s AU$1 billion fund raising from the issue of senior unsecured debt via a syndicated loan facility.
- PointsBet (ASX:PBH) bagged an investment from SIG Sports. PBH share price reversed earlier losses as both companies remained upbeat on the new investment. The investment will assist PBH with expansion and growth North America.
- Vicinity Centres (ASX:VCX) upgraded its FY22 guidance and uplifted its preliminary valuations. The improved forecast was majorly a result of sustained retail sales strength and strong cash collections.
- Shopping Centres Australasia Property Group (ASX:SCP) acquired five Australian convenience-based shopping centres. The assets were acquired from Primewest, a subsidiary of Centuria Capital Group (ASX:CNI).
On the global front
Growth concerns seem to be frightening investors and rate hikes from major banks are making things worse. In the US, trade remained shut with the nation on a holiday. Later this week, Fed Chair Jerome Powell is expected to the house on The Fed’s last week commitment to tame inflation.
In the UK, inflation figures are anticipated to reach an alarming high, inciting fears of a faster rate hike by the Bank of England.
In Asia, shares slipped on worries of the US Fed hiking rates to any level to tackle inflation. Hong Kong’s Hang Seng and Chinese Shanghai Composite were lower. However, Chinese blue chips gained 0.5%, as US President Joe Biden considered removing some tariffs in China. Japan’s Nikkei and South Korean KOSPI were also down.
©2022 Kalkine Media®
On the commodities front
Oil prices were lower, based on concerns of slowing global economic growth and fuel demand. Brent crude futures slipped, and the US West Texas Intermediate was also down. While Russian oil remains less accessible to the globe due to western sanctions, oil product exports from China have also declined, keeping global markets tight on supplies. On the flipside, China's crude oil imports from Russia soared 55% in comparison to last year, displacing Saudi Arabia as the top supplier.
The Chinese gasoline exports also dropped 46% in May in comparison to the number a year earlier. As per the Chinese customs data released on Saturday, even diesel exports plunged 93% as companies ran short of export quotas.
In metals, iron and copper traded low. Gold was shining bright, up in Asia as the US dollar weakened due to a holiday halt on trade. Gold prices last week were lower based on stronger dollar over interest rate hikes by central banks. In other precious metals, silver, platinum and palladium also remained higher.
