ASX drops 0.69% on weak Chinese cues, Appen emerges as top gainer

Today, the ASX 200 could not sustain morning cheers. The benchmark index dropped 0.69% to trade at 7.105.90 points by market close. While in the past last five trade days the index has grown by 0.59%, it is still down 4.55% on a year-to-date basis.

In the early trading hours, the domestic market was up after the Federal Reserve’s meeting minutes showcased a less hawkish picture than predicted by investors. However, the decline in Australian shares by the day’s end came from China’s new warning on its June quarter growth.

Sectoral and index trends

Nine of 11 industrial sectors on the ASX 200 were in the red zone today, erasing early hour gains. Consumer staples was the top loser, down 2.42%. The top gainer was information technology, up 1.09%, bouncing back from its recent decline.

The volatility indicator- A-VIX also closed sharply lower, down 3.28%. The All-Ordinaries index was 0.71% lower today. Large cap representative ASX 50 index was also down 0.78%, followed by midcap index ASX MIDCAP 50 which lost 0.092%.

Top gainers and losers

2022 Kalkine Media ®, Source- ASX 200

Technology company Appen Limited (ASX:APX) emerged as the top gainer after receiving an unsolicited, conditional and non-binding indicative proposal offer from Canadian Telus International to acquire 100% of Appen. On the flipside, Nanosonics Limited (ASX:NAN), from the healthcare sector, was the biggest loser of the day. While healthcare sector was down 0.65%, Nanosonics lost over 5.99%.

Newsmakers of the day

• Appen Limited (ASX:APX)- The data company is engaging in discussions with Canada-listed Telus International to better understand the terms of the indicative proposal. Appen has reportedly carefully considered the proposal and advice of financial advisers before seeking improved terms.
• Virtus Health Ltd (ASX:VRT) is now engaging with BGH Capital after not receiving a reply from suitor CapVest. BGH Capital's improved takeover bid expires on 31 May 2022.
• Westpac (ASX:WBC) has transferred its AU$37.8 billion funds in its BT-branded corporate and retail super funds to the Mercer Super Trust. The funds include the Westpac Group Super Plan which belongs to the bank employees. It might also sell its Advance Asset Management multi-asset funds subsidiary to Mercer. However, the transfer is subject to regulatory approvals and fund transfer and sale is expected by first half of 2023.
• Further, Fonterra (ASX:FSF), Catapult (ASX:CAT) and Volpara (ASX:VHT) released their financial results on the exchange.

Related Read- Volpara Health (ASX:VHT) exceeds revenue guidance in FY22

Global markets

Taking a broader view, Asian stocks witnessed a choppy trade as markets weighed the downbeat Chinese June quarter remarks over the Federal Reserve minutes that caused initial cheers. Japanese Nikkei was down 0.27%, Hong Kong’s Hang Seng slumped 0.58% and the Korean KOSPI was down 0.18%. However, Chinese shares rose, and Shanghai’s SSE composite index was up 0.50%

Today, even the Bank of Korea raised its key interest rate to tackle inflation. New Zealand’s central bank is expected to come out with combat steps against surging prices. Other key events on watch out for are the US GDP data, personal income and spending data and the University of Michigan’s consumer sentiment data.

Commodities front

Global liquefied natural gas (LNG) market was bracing uncertainty on the backdrop of muddy demand forecast from Europe and top importer China. Oil prices were rising, on signs of tight supply and Hungary’s plans to ban imports from Russia. Brent crude was down 0.35% while US West Texas Intermediate (WTI) moved up 0.5%. Analysts were seeing a drop in China’s demand for thermal coal in the remaining first half, with ongoing virus restrictions and an economic slump. 

Also read- Aussie Petrol Prices Set For Record Highs: Factors Fuelling Rise