ASX ends 0.7% lower after RBA tweaks bond buying; telco, tech drag

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ASX ends 0.7% lower after RBA tweaks bond buying; telco, tech drag

 ASX ends 0.7% lower after RBA tweaks bond buying; telco, tech drag
Image source: Copyright © 2021 Kalkine Media Pty Ltd.


  • The S&P/ASX200 ended 24.20 points or 0.33% lower at 7,290.
  • The index declined over 1% to hit an intraday low of 7,261.
  • The market sentiments were dented after the RBA announced the plan to tweak its quantitative easing to weekly AU$4-billion bond purchases.

Australian shares ended lower on Tuesday, amid a sharp sell-off in the final hour of the day’s trade after the Reserve Bank of Australia (RBA) announced the plan to tweak its quantitative easing to weekly AU$4-billion bond purchases until November. The central bank, however, kept the official cash rate steady at 0.1% and retained the bond yield target of 10 basis points.

The S&P/ASX200 ended 53.20 points or 0.73% lower at 7,261.80, crossing below its 20-day moving average, paring early gains. Early today, the index opened higher at 7,308 and gained as much as 0.5% to hit an intraday high of 7,343. In the final hours of day’s trade, the index swinged over 1% from the day’s high to hit an intraday low of 7,261.

The lingering concerns over rising COVID-19 cases also weighed on the market. In the past 24 hours, NSW reported 18 new locally transmitted COVID-19 cases, while two new cases were recorded in Western Australia.

The market breadth, indicating the market's overall strength, was weak with nine of the 11 sectoral indices ending in red. The telecommunications services sector was the top laggard with a 1.35% loss. Among others, health care, information technology, consumer discretionary, industrials and consumer staples were notable losers.


The Last Trade || ASX Ends 0.7% Lower After RBA Tweaks Bond Buying; Telco, Tech Drag


Meanwhile, the energy sector was the best performer on the ASX with a 1.53% gain. The Aussie energy stocks gained momentum, tracking crude oil prices after OPEC nations called off talks at output levels, which meant that no deal to boost production had been agreed upon.

The information technology ended in red for the third consecutive session. In the tech space, buy-now-pay-later giant Afterpay (ASX:APT) and network operator Megaport (ASX:MP1) were among top losers.

Meanwhile, ASX-listed energy stocks continued gaining momentum for the third consecutive session. Index heavyweight Woodside Petroleum (ASX: WPL), Santos (ASX:STO), Oil Search Ltd (ASX:OSH), Origin Energy Ltd (ASX:ORG), Beach Energy Limited (ASX:BPT) and Ampol Limited (ASX:ALD) were trading in green.

In the banking sector, all the Australia’s big four lenders - Commonwealth Bank of Australia (ASX:CBA), Australia and New Zealand Banking Group Limited (ASX:ANZ), Westpac Banking Corporation (ASX:WBC) and National Australia Bank Limited (ASX:NAB) – ended in red post RBA policy announcement.

Top Gainers and Losers

Energy firm Oil Search Ltd (ASX:OSH) was the top percentage gainer on the ASX, rising 4.7%. Some of the other top gainers were Whitehaven Coal Ltd (ASX:WHC), EML Payments Limited (ASX:EML), IGO Limited (ASX:IGO), Pilbara Minerals Limited (ASX:PLS), Incitec Pivot Limited (ASX:IPL) and Beach Energy Limited (ASX:BPT).

On the flip side, health care firm Polynovo Limited (ASX:PNV) was the worst performer on the ASX, falling 9.13%. Ramelius Resources Limited (ASX: RMS), Appen Limited (ASX: APX), Polynovo Limited (ASX:PNV), Clinuvel Pharmaceuticals Ltd. (ASX:CUV), Orocobre Ltd (ASX:ORE) and Regis Resources Limited (ASX:RRL) were among notable losers.

Shares in news

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Shares of mineral processing services provider Calix Limited (ASX:CXL) jumped as much as 11.6% to AU$3.09, hitting a record high. Calix and Tarmac, a UK-based sustainable building materials and construction solutions business, have executed a pact to develop a calciner for lime production with carbon dioxide capture.

Shares of gold miner Ramelius Resources Limited (ASX:RMS) fell as much as 6% to hit a 2-month low of AU$1.64 on missing the gold production target. The company has recorded a full-year gold production of 272,109 ounces, below its guidance range. The company further stated that its June-quarter gold production of 61,840 ounces was also below the guidance range of 65,000 ounces to 70,000 ounces. The company said that numerous rainfall events and COVID-19 lockdown restrictions hit production from Edna May production centre in Western Australia.

Mineral Resources (ASX:MIN) shares rose 0.5% to AU$56.7 after its wholly-owned subsidiary Energy Resources Limited (ERL) secured a drilling rig for conventional gas exploration. The exploration rig is for well Lockyer Deep 1, situated in the onshore Perth Basin, Western Australia. It is a highly prospective northern section of the Perth Basin hosting several significant recent conventional gas discoveries.

Shares of Westpac Banking Corporation were trading marginally higher after the lender sold its New Zealand life insurance business for AU$373 million (or NZ$400 million) to Fidelity Life Assurance Company, a locally owned life insurer. The bank has also signed a 15-year agreement to distribute life insurance products to Westpac’s New Zealand customers. The deal is expected to be completed by the end of 2021, subject to requisite approvals. 

The share price of Sydney Airport (ASX:SYD) retreated over 1% to AU$7.7 after surging over 30% in previous session amid news that the company had received AU$22-billion takeover bid from an infrastructure consortium. The Sydney Kingsford Smith Airport operators said it had received an AU$8.25 per share takeover bid from a consortium of infrastructure investors, including IFM Investors and Q Super.

Shares of Abacus Property (ASX: ABP) were down 0.6%, paring early losses, after the real estate investment trust said it had purchased five assets worth AU$160-million from Storage King, a self-storage group.

Asian Markets Edge Higher 

Asian markets were trading mostly higher on Tuesday, barring China and Hong Kong, driven by a robust US job data, which shrugged off rate-hike concerns.

Japan's Nikkei was trading 0.35% higher, while Taiwan’s Weighted Index rose 0.11%. Singapore’s Straits Times rallied over 1%, emerging as the top performer in the region. India’s BSE Sensex rose 0.1% in opening trade.

Bucking the trend, Hong Kong’s Hang Seng was down 0.6%, and New Zealand’s benchmark S&P/NZX 50 fell 0.35%. China’s Shanghai Composite dropped 0.5%.

Meanwhile, global stock markets closed higher on Monday, with European stocks ending on a positive note after data showed that eurozone business activity had surged in June. Trading volumes, however, were subdued, as markets in the US remained closed for an extended weekend on the eve of Independence Day.


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