ASX Market Update: Mining Stocks Drag Down Index; AMP Sees Notable Rally

August 08, 2024 01:12 PM AEST | By Team Kalkine Media
 ASX Market Update: Mining Stocks Drag Down Index; AMP Sees Notable Rally
Image source: shutterstock

The Australian sharemarket experienced a downturn at midday on Thursday, with the benchmark S&P/ASX 200 Index dropping 0.5% or 40.4 points to 7659.4. The decline was largely driven by a pullback in mining stocks, which led to a drop in eight of the eleven sectors on the index. The negative trend mirrored the performance of US markets, where all three major indices closed lower after a poorly received auction of 10-year Treasury notes. 

Mining Sector Struggles 

The materials sector faced significant pressure, falling by 1.9%. Key players in the sector, such as BHP Group Ltd (ASX:BHP) and Rio Tinto Ltd (ASX:RIO), both saw declines of 2.2%, while Fortescue Metals Group Ltd (ASX:FMG) dropped 1.3%. The decline in these stocks followed a decrease in commodities prices, with Singapore iron ore futures slipping 1.1% to $US99.8 per tonne. 

Overnight, a $US42 billion auction of 10-year Treasury securities resulted in a yield higher than initially anticipated, contributing to the market’s downward trend. Analysts suggest that it may take several weeks for markets to recover fully from this recent downturn. Additionally, comments from a key Bank of Japan official are providing some relief, though volatility is expected to remain elevated for the near future. 

AMP Reports Strong Earnings 

In contrast, AMP Ltd (ASX:AMP) saw a substantial gain of 9.7% after announcing a 5.4% increase in net profit to $118 million for the half-year. The company also reported a statutory net profit of $103 million and declared an interim partially franked dividend of 2 cents per share. 

Other Notable Movements 

- Transurban Group (ASX:TCL): Despite forecasting a higher dividend for the coming year and reporting a significant increase in annual net profit to $376 million, Transurban shares fell by 1.4%. This drop occurred even as the company benefited from reduced construction and finance costs. 

- Light & Wonder Inc (ASX:LNW): The gaming company saw a rise of 2.2% following a strong quarterly report, which highlighted a 14% increase in gaming revenue to $US539 million, driven by higher sales of gaming machines. 

- Myer Holdings Ltd (ASX:MYR): Shares of Myer fell sharply by 8.3% after the retailer projected a decrease in net profit to between $50 million and $54 million for FY24, down from $71.1 million in the previous year. The company cited challenging trading conditions, store closures, and inflationary pressures as contributing factors. 

- Mirvac Group (ASX:MGR): The property developer and fund manager saw its shares tumble by 8.8% after forecasting lower earnings and distributions for FY2025. Increased costs on apartment projects are expected to impact margins significantly. 

- IGO Ltd (ASX:IGO): The mining company’s shares dropped 2.3% following the announcement that it is exploring the divestment of some nickel assets. IGO has entered an agreement with Medallion Metals Ltd (ASX:MM8) regarding the Cosmic Boy processing facility and associated infrastructure at its Forrestania nickel project. 

The ASX 200 faced challenges, individual stocks like AMP and Light & Wonder showcased notable performances amidst a broader market decline. 


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