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Highlights
- Today, ASX 200 dropped 2.1%, or 155.3 points, to 7318.
- There were heavy losses across energy and materials sectors in response to falling commodity prices.
- Fears about new coronavirus lockdowns in China are impacting markets, and predictions about Australia’s next interest rate rise seem to be flying thick and fast.
Investors are closely eying a plethora of economic, health and geo-political trends currently, which is paving the path of global share markets.
The fall in iron ore prices propelled by concerns about Chinese demand amid the country’s worsening Covid-19 outbreak is weighing on miners. Billionaire entrepreneur Elon Musk has agreed to buy Twitter for AU$61.4 billion, one of the biggest leveraged buyouts deals in history. Besides, it’s an important reporting week for the mega techs that continue to dominate US equities.
On the economic front, Federal Reserve chairman Jerome Powell is set to hold his first in-person press conference since the pandemic began. Some suggest that the risk of a US recession next year is increasing due to weaker household spending and disposable income.
Meanwhile back home in Australia, quarterly inflation data is due tomorrow, with underlying inflation expected to land at 1.1%. Time will show if the case for a pre-election interest rate rise is strengthening. The Reserve Bank of Australia (RBA) will hold its next board meeting next week.
How did ASX 200 perform today?
The local market started this shorter trading week lower, declining 2.3% in the early trading hours. Energy stocks dived, joined by materials. Health care was the best performer, down 0.3%. At mid-day, the ASX 200 was still down 1.9%, with mining and energy stocks declining.
Eventually, the index was instead led to heavy losses, majorly catalysed by jitters about China and interest rate rises. It finished down 2.1% to 7,318.
On the sectoral front, all 11 sectors ended lower. The session's top sector, industrials, was lower by -0.67% but up +1.59% for the last five days.
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Top gainers and losers
The top performer today was Virgin Money (ASX:VUK), up over 2%. It was followed by Unibail-Rodamco-Westfield (ASX:URW). Next up was Nufarm Limited (ASX:NUF), which expects to report underlying EBITDA of between AU$320 - AU$340 million for 1H22. Other gainers of the day were Life360 (ASX:360) and Reliance Worldwide Corporation (ASX:RWC).
On the other side, in the red zone of the ASX 200, EML Payments (ASX:EML) was the biggest laggard, its stock down over 38%, thanks to a profit downgrade which pointed to ongoing troubles in Europe.
Other stocks in this zone were Mineral Resources (ASX:MIN), Sims Limited (ASX:SGM), Champion Iron (ASX:CIA) and BlueScope Steel (ASX:BSL).
Asian and global market
Weak trade in Asian market was noticed as a global sell-off was triggered by aggressive US Fed tightening and China covid fears. MSCI's index of Asia-Pacific shares outside Japan was down by 1.65%. Japan's Nikkei plunged 1.91%, South Korea's Kospi plunged 1.63%, China's Shanghai shed 2.45%Hong Kong's Hang Seng plunged 2.54%. Indian equity benchmarks also bled red.
Stocks have started the week on a volatile note. Overnight, The Dow Jones Industrial Average closed up 238.06 points, The broader S&P 500 index added 24.34 points and the Nasdaq finished up 165.56 points.
