ASX trims losses to 0.5%; BHP, Mineral Resources, IGO hammered

Highlights

  • Australian benchmark index, the ASX 200, traded 0.5% lower at 7,466.70 by the lunchtime.
  • Eight of the 11 sectors traded in red, while material and energy declined the most.
  • Civil and mining contractor NRW Holdings topped the gainer chart with 14% gain.
  • Codan, Mineral Resources, IGO, BHP and Deterra Royalties were among the top losers on the ASX pack.
  • NSW has reported 681 new local COVID-19 cases in the past 24 hours. 

Australian shares continued to trade lower by the afternoon, albeit erasing half of the early losses, led by sharp sell-off in blue-chip mining stocks such as BHP, Rio Tinto, Fortescue, and Mineral Resources. The weak cues from Wall Street and a fall in commodity prices also weighed on market sentiment, while a record spike in COVID-19 cases also left investors jittery. In the last 24 hours, NSW has reported 681 new local infections, a new daily record for the state.     

The ASX 200 was currently trading 35.40 points or 0.47% lower at 7,466.70 by the lunchtime. Extending losses for the fourth straight session, the index opened lower today and declined as much as 1% to hit a low of 7,429.

Investors also reacted to corporate earnings with some big players such as Origin Energy, Iress, Star Entertainment Group, Evolution Mining, Redbubble, Perpetual, Newcrest Mining and others declaring their earnings results this morning.

On the sectoral front, eight of the 11 sectors were trading in red. The material sector was the worst performer with over 3% loss, owing to a fall in iron ore price. Iron ore slumped 4.6% overnight to US$153.39 a tonne. In the material space, index heavyweight BHP Group (ASX: BHP) was the worst performer, followed by Rio Tinto Group (ASX: RIO) and Fortescue Metals Group (ASX:FMG).

                           

Why Mining Stocks BHP, Rio Tinto, Fortescue are leading market losses?

 

The material sector was followed by energy, which dropped 1.8% due to a dip in crude oil prices. Oil prices have also softened with Brent crude dropping 2.4% to US$67.41 per barrel, while US oil fell 3.1% to US$64.52 a barrel.

Among others, A-REIT, consumer staples, utilities and telecom witnessed selling pressure.

Bucking the trend, the consumer discretionary sector emerged as the best performer with 0.8% gain. The Information technology and health care sectors also saw spurt in buying activity.

Top gainers and losers

Image source: katjen, Shutterstock.com

Civil and mining contractor NRW Holdings (ASX:NWH) topped the gainer’s chart by rising nearly 14%. The stock rallied after the company reported an 11.5% rise in revenue to AU$2.3 billion for FY21, which was in line with the company’s guidance. The earnings before interest, taxes, depreciation, and amortization (EBITDA) rose 6.7% to AU$266.7 million.

Some of the other notable gainers were telecom service provider Chorus (ASX: CNU), financial services firm Netwealth Group Ltd (ASX: NWL), gaming and entertainment firm Star Entertainment Group (ASX:SGR) and travel firm Corporate Travel Management (ASX:CTD).

On the flip side, tech firm Codan (ASX: CDA) emerged as the top loser, falling 8.7%. Some of the other notable losers were mining firm Mineral Resources (ASX:MIN), metal and mining group IGO (ASX: IGO), iron ore miner BHP Group (ASX:BHP) and royalty company Deterra Royalties (ASX:DRR).

Shares in news

Share of utilities-focused firm Origin Energy (ASX:ORG) dropped nearly 2% on disappointing earnings for the full financial year 2021. The company reported a statutory loss of AU$2.29 billion for FY21, impacted by the COVID-19 pandemic and the rapid rise of renewable energy.

Shares of Newcrest Mining (ASX:NCM) were up 0.5% after the gold miner delivered a strong annual profit. The earnings of the country’s largest listed gold miner were boosted by higher gold prices, which rose over 25% in 2020 due to the pandemic-led uncertainty.

Blue-chip miner BHP Group (ASX: BHP) extended the fall for the second day on the decision to merge the petroleum business. The mining giant will sell its petroleum assets to Woodside Petroleum (ASX:WPL) to create a new and bigger entity.

Shares of Humm Group (ASX: HUM) climbed nearly 2% after the buy now, pay later (BNPL) player reported robust earnings for the 2021 financial year. The cash net profit after tax (NPAT) more than doubled to AU$68.4 million in FY21.

Shares of Domino’s Pizza (ASX: DMP) continued gaining streak for the second day, rising over 2% on robust earnings. The company on Wednesday reported a 27% growth in underlying earnings before interest and tax (EBIT) to AU$293 million for the 2021 financial year. Food sales surged 14.6% to AU$3.74 billion, driven by an increase in stores as 126 new outlets were started in Japan alone. 

Shares of Resolute Mining (ASX: RSG) fell 1.7% after gold miner flagged an impairment between US$165 million to US$175 million for its half-year result to 30 June 2021. The company is set to release its half-year results on August 27.

Shares of online marketplace Airtasker (ASX: ART) gained 0.5% following the earnings report. The company has reported a net loss of AU$9.7 million, while sales grew 38% to AU$26.5 million in the financial year 2021.

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