ASX bleeds red with worst fall in seven months; BHP, Rio, Fortescue slump

Highlights

  • The Australian benchmark index, ASX 200, ended 1.90% lower at 7,369.50.
  • All 11 sectors ended in the red, while tech and telecom stocks declined the most.
  • Virgin Money UK PLC, Omni Bridgeway, Orocobre, EML Payments, Pilbara Minerals topped the losers’ chart.
  • Asian shares traded lower on concerns about global economic growth.
  • Bitcoin fell, while Ether rose in subdued trade.

The Australian share market ended sharply lower on Thursday, with all the sectors bleeding in red. The market sentiment was dented by concerns that the Delta variant of COVID-19 could derail the global economic recovery. Blue chip miners, industrial and energy stocks were hammered, owing to fall in commodity prices, especially that of iron ore.  

The benchmark index, ASX 200, ended lower by 142.50 points or 1.90% at 7,369.50. The index opened in red today and declined 2.2% in intraday trade to hit a low of 7,344.30, marking the worst day since late February 2021.

In a rare sight, all the 11 sectors ended in negative terrain, while information technology declined the most. The tech sector crashed 2.9%, in line with its US counterpart, NASDAQ Composite, which finished lower in overnight trade. Index heavyweights Afterpay (ASX: APT), Xero (ASX: XRO), WiseTech Global (ASX: WTC), NEXTDC (ASX: NXT) and Megaport (ASX: MP1) were among top losers.

The tech sector was followed by telecom, which tumbled 2.5%. Financial, industrial, energy, material and consumer discretionary sectors also witnessed sharp sell-offs, falling over 2%.

In the banking space, all big four banks - Westpac Banking Corporation (ASX:WBC), Commonwealth Bank of Australia (ASX:CBA), Australia and New Zealand Banking Group (ASX:ANZ) and National Australia Bank (ASX:NAB) – ended in red.

Meanwhile, material stocks also witnessed selling pressure due to fall in iron ore prices. Iron ore futures slipped over 4% in overnight trade amid subdued Chinese demand as the country imposed ban on steel production to reduce carbon emissions. The index heavyweights BHP Group (ASX:BHP), Rio Tinto (ASX:RIO) and Fortescue Metals Group (ASX:FMG) finished lower.   

In a similar trend, energy stocks also ended lower, tracking a fall in crude prices. The sectoral leaders Woodside Petroleum (ASX:WPL), Santos (ASX:STO), Oil Search (ASX:OSH) and Beach Resources (ASX:BPT) ended in the red. 

Top gainers and losers

Image source: Lin Xiu Xiu, Shutterstock.com

English bank Virgin Money UK PLC (ASX:VUK) was the worst performer on the ASX with 7.9% loss. Some of the other top laggards were litigation funding company Omni Bridgeway (ASX: OBL), mineral explorer Orocobre (ASX: ORE), payment solutions firm EML Payments (ASX: EML) and miner Pilbara Minerals (ASX: PLS).

On the flip side, medical device manufacturer ResMed Inc (ASX: RMD) topped the gainers’ chart by rising 1.9%. Some of the other notable gainers were coal miner Whitehaven Coal (ASX: WHC), Fisher and Paykel Healthcare Corporation (ASX: FPH), packaging company Amcor PLC (ASX: AMC) and agribusiness firm Elders (ASX:ELD).

Newsmakers

Shares of Omni Bridgeway (ASX: OBL) tumbled as much as 13% in intraday trade after the litigation funding company issued an update on Wivenhoe Dam flood case. The company said that one of its Brisbane floods class action targets was found not liable in a court decision.

Shares of Australian exploration company Anson Resources (ASX:ASN) jumped more than 22% after the Company announced impressive results from test work. The company said it has achieved positive results from test work conducted by NOVONIX for quality lithium-ion batteries using Anson’s high purity lithium carbonate and lithium hydroxide. The outcomes of this test work will be shared with potential offtake partners and potential customers during Anson future marketing campaigns.

The share price of Epsilon Healthcare (ASX:EPN) rallied over 13% on partnership with The Valens Company (TSX:VLNS). The firm has entered into a long-term exclusive partnership with The Valens Company for access to Epsilon’s Southport Manufacturing Facility. The move will help Valens to expand footprint in global markets in Asia-Pacific Regions, Latin America, Europe and the UK.

Shares of Pinnacle Investment Management (ASX: PNI) fell nearly 2% following  a business update. The investment management firm has acquired additional 10% stake in Coolabah Capital Partners, and it has also proposed to acquire marketing and retail distribution firm Winston Capital Partners.

Shares of Weebit Nano (ASX:WBT) zoomed as much as 60% after the semiconductor memory technology company signed its first commercial deal with a subsidiary of Nasdaq-listed semiconductor foundry, SkyWater Technology Inc.

Shares of Gold Road Resources (ASX: GOR) surged 3% intraday after unveiling its half yearly earnings report. For the first six months ended June 30, 2021, the firm’s net profit after tax dropped nearly 20% to AU$19.1 million, from AU$23.4 million in the prior year. Earnings before interest, tax, depreciation and amortisation (EBITDA) fell 2% to AU$60 million, while EBITDA margin rose 1% to hit 46%. Revenue from gold sales dipped to AU$130 million, compared to AU$135 million in the same six-month period last year. The board of the company has also declared fully franked dividend of 0.5 cents per share.

Asian markets fall on growth concerns

Image source: ranjith ravindran. Shutterstocks.com

Shares in the Asia-Pacific region were trading mostly lower on Thursday, barring China, following negative finish at Wall Street in overnight trade. The regional markets witnessed cautious trading as concerns about slowing global growth and the potential tapering of economic stimulus by central banks left investors jittery. Investors also reacted to China’s August inflation data, which rose 0.8% year-on-year in August.

Hong Kong’s Hang Seng index emerged as the worst performer in the region by falling 1.6%. It was followed by South Korea’s KOSPI, which traded lower by 1.4%.

Japan’s Nikkei dropped 0.7%, Indonesia’s Jakarta Composite fell 0.25%, and Thailand’s SET Composite fell 0.2%.

In a similar trend, India’s BSE Sensex dropped 0.1% in opening deals, while Taiwan’s Weighted Index also traded marginally lower.

Bucking the trend, China’s Shanghai Composite edged higher by rising 0.1%.

Meanwhile, Wall Street closed lower in overnight trade on Wednesday amid concerns that the Delta variant of COVID-19 may derail the economy’s recovery. The uncertainty about timing of bond tapering also spooked investors. The S&P 500 benchmark of US blue chips fell 0.5%, the Dow Jones dropped 0.25%, and the tech-savvy NASDAQ plunged 0.65%.

Bitcoin falls, Ether rises in subdued trade

Image source: Wit Olszewski, Shutterstock.com

Major cryptocurrencies were trading mostly lower during the Asian trading hour on Thursday, after massive crash in the previous session, amid reports that US-listed cryptocurrency exchange platform Coinbase Global is facing regulatory scrutiny.

The price of Bitcoin, the world's largest cryptocurrency by market capitalisation, was currently trading 0.7% lower at around US$46,000. The most popular currency has declined nearly 7% in the last one week amid slew of negative developments. 

Bucking the trend, Ether, the world’s second largest crypto, was up 1.2% to trade at around US$3,500.      

Meanwhile, Cardano, the third largest cryptocurrency by market capitalisation, dipped nearly 1%, while Dogecoin prices fell 1.4%. Among others, Stellar, Uniswap and Litecoin also witnessed selling pressure.  

On Wednesday, the crypto market witnessed sharp volatility due to delays in trading. The delay was observed after El Salvador ran into snags after becoming the first country to officially adopt Bitcoin as legal tender. The Central American nation had to temporarily unplug a digital wallet to cope with demand.

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