ASX 200 trades lower on weak Wall Street cues

Summary

  • As of 10:30 AM AEST, the ASX 200 dropped 18.4 points or 0.25% to 7,473.
  • On Tuesday, the A-VIX has gained 0.07 points or 0.55% (as of 10:30 AM AEST) and is trading at 11.88.
  • PointsBet Holdings has sold a decent equity worth AU$81 million to institutional investors.

The Australian benchmark index, ASX 200, has opened with a slight uptick of 4.3 points to 7,495.7 on Tuesday. However, weak commodity prices are expected to weigh down local resource shares, while investors await the Reserve Bank of Australia’s policy meeting later in the day.

The Australian and New Zealand dollars hovered around their recent lows on Monday, against the US dollar amid fears that China's regulatory curb could slow investment flows. The Aussie dollar fell 0.04% at US$0.7343 on the back of a recent survey showing that factory activity in China increased at the slowest pace in 17 months in July 2021.

Image Source: Copyright © 2021 Kalkine Media

On Monday, US stocks closed higher on optimism over strong corporate earnings and government infrastructure spending. The oil markets were jittery on broader macroeconomic fear and the continued spread of the delta variant of COVID-19.

The Dow Jones fell 0.28% to 34,838.17, while the S&P 500 slipped 0.18% to 4,387.15. The NASDAQ Composite gained a mere 8.39 points or 0.06% to hit 14,681.07.

Read More: Is another stock market crash coming soon? What should you do?

How has the market performed so far?

As of 10:30 AM AEST, the ASX 200 dropped 18.4 points or 0.25% to 7,473. Same scenario continued with the ASX All Ordinaries Index, which has fallen 0.22% to 7,743 so far, weighed down by Poseidon Nickel Limited (ASX:POS) and Grange Resources Limited (ASX:GRR).

Data Source: ASX Website (as of 3 august, 10:30 AM AEST)

Shares weighing down the ASX 200 are Mineral Resources Limited (ASX:MIN) and BlueScope Steel Limited (ASX:BSL), both falling 1.74% and 1.71%, respectively. On the other hand, the stocks trying to keep the index from falling are, the heavyweight Afterpay Limited (ASX:APT) and Credit Corp Group Limited (ASX:CCP), gaining 13.97% and 4.98%, respectively.

The Early Trades || Tug of war between IT and resource sector: Where is ASX 200 heading?

On Tuesday, the A-VIX has gained 0.07 points or 0.55% and is trading at 11.88. Over the last five days, the index has risen 2.93%. The market breadth is depicting a cautious state of investors ahead of the RBA meet, with eight out of the 11 sectors trading in the red. The metals and mining sector is the top laggard, with a 0.34% fall, while the IT index has surged over 4.28%, primarily driven by the rally in Afterpay.

Newsmakers

Crownwell Property Group’s (ASX:CMW) chief executive Xavier Walsh will step down from his role on 20 August 2021, after less than a year in charge. However, he will remain to assist the company until his employment ends on 9 December 2021.

PointsBet Holdings Limited (ASX:PBH) has sold a decent equity worth AU$81 million to institutional investors and will now open a retail entitlement offer this week, which is to be closed two weeks later.

Image Source: Copyright © 2021 Kalkine Media

Cooper Energy Limited (ASX:COE) has reported a 21% increase in production at the Sole gas field in July 2021, compared with the average of all four quarters of FY21. The primary reason was better performance at the Orbost Gas Processing Plant.

Emeco Holdings Limited (ASX:EHL) has completed a full repayment of its 9.25% US notes worth a whopping US$180 million. The repayment was funded from the issued notes and cash reserves of the company.

Qantas Airways Limited (ASX:QAN) has decided to stand down around 2500 of Qantas and Jetstar employees for around two months, forced by border closures and COVID-19 outbreaks. The employees include airport workers, pilots and cabin crew.   

Read More: How has the COVID-19 pandemic transformed marketing strategies?

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