Miners tumble, RBA holds rates: ASX closes 0.6% lower

Market Reports

by Lauren Evans

The Australian sharemarket remained in negative territory in the afternoon session as miners, banks and insurers weighed on the index. At the closing bell, the S&P/ASX 200 was 0.6 per cent or 47 points lower at 7,324.

Across the sectors, 5 out of 11 closed in the red. Materials became the worst-performing sector, down 2.1 per cent, followed by financials, down 1.3 per cent, then energy, down 1 per cent. Real estate investments trust were a spotlight today, up 1.2 per cent as the best-performing sector. 

The best-performing stock in the S&P/ASX 200 was property giant Goodman Group (ASX:GMG), closing 5.6 per cent higher following an upgrade to its FY22 guidance. The worst-performing stock in the S&P/ASX 200 was Whitehaven Coal (ASX:WHC), closing 9.5 per cent lower.

Heavyweight miners tumbled as iron ore and steel prices fell, with BHP (ASX:BHP) closing 2.2 per cent lower, Fortescue (ASX:FMG) closing 2.4 per cent lower and Rio Tinto (ASX:RIO) closing 2.5 per cent lower, while lithium miner IGO (ASX:IGO) closed 8.7 per cent lower. Energy producer Beach Energy (ASX:BPT) closed 4 per cent lower after its managing director unexpectedly resigned.

Major banks crumbled, with Westpac (ASX:WBC) closing 2.4 per cent lower, ANZ (ASX:ANZ) closing 1.1 per cent lower, NAB (ASX:NAB) closing 0.9 per cent and Commonwealth (ASX:CBA) closing 0.5 per cent. Insurance groups also took a hit off the back of IAG’s fall, with Suncorp (ASX:SUN) closing 4.3 per cent lower and QBE Insurance (ASX:QBE) closing 2.2 per cent lower. The Reserve Bank board met this afternoon and has decided to maintain the cash rate target at 10 basis points. See economic details below for more details. 

IPO

Remsense Technologies (ASX:REM) started trading today. Their shares issued at $0.20 and closed flat at $0.54.

Aurum Resources (ASX:AUE) started trading today. Their shares issued price at $0.20 and closed at flat at $0.22. 

Local economic news

The Reserve Bank board met this afternoon and has decided to maintain the cash rate target at 10 basis points and the interest rate on Exchange Settlement balances at zero per cent. The board will also continue to purchase government securities at the rate of $4 billion a week until at least mid February 2022 and discontinue the target of 10 basis points for the April 2024 Australian Government bond.

Inflation has picked up, but in underlying terms is still low, at 2.1 per cent. The headline CPI inflation rate is 3 per cent and is being affected by higher petrol prices, higher prices for newly constructed homes and the disruptions in global supply chains. The board will not increase the cash rate until actual inflation is sustainably within the 2 to 3 per cent target range. The decision to discontinue the yield target reflects the improvement in the economy and the earlier-than-expected progress towards the inflation target.

Meanwhile, ANZ and Roy Morgan released the weekly consumer confidence index.Consumer Confidence increased by 1.6 points to 108.4 on the weekend and is now at its highest for nearly four months since July 10/11, 2021 (110.0). Consumer Confidence is now just above the 2021 weekly average of 108.2 and 8.5 points higher than the same week a year ago, October 31/ November 1, 2020 (99.9).

Consumer Confidence this week was up in Sydney, Melbourne and Canberra as all three cities continued to re-open after months in lockdown. In contrast, Consumer Confidence fell slightly in Brisbane, Perth and Adelaide. This week’s increase was driven by increasing numbers of Australians saying they are ‘better off’ financially than a year ago and saying now is a ‘good time to buy’ major household items.

Company news

Please join us for Stocks of the Hour here. 

Australian stock transfer company Computershare (ASX: CPU) has completed the purchase of Wells Fargo Corporate Trust Services that was announced in March.

Structural changes and increased customer demand has led the property giant Goodman Group (ASX:GMG) to up its guidance for the 2022 financial year.

Insurance Australia Group (ASX:IAG) has increased its expectation for financial year 2022 net natural perils claim costs, after severe storm and hail activity experienced over October.

Cimic (ASX:CIM) subsidiary CPB Contractors will be the builder of the new 39-storey premium commercial development Parkline Place, located above the north entrance to Sydney Metro’s Pitt Street Station.

Futures

The Dow Jones futures are pointing to a fall of 96 points.
The S&P 500 futures are pointing to a fall of 11 points.
The Nasdaq futures are pointing to a fall of 28 points.
The SPI futures are pointing to a fall of 51 points when the market next opens.

Best and worst performers

The best-performing sector was Real Estate Investment Trusts, up 1.2 per cent. The worst-performing sector was Materials, down 2.1 per cent.

The best-performing stock in the S&P/ASX 200 was Goodman Group (ASX:GMG), closing 5.6 per cent higher at $23.49. It was followed by shares in Charter Hall Group (ASX:CHC) and Megaport (ASX:MP1).

The worst-performing stock in the S&P/ASX 200 was Whitehaven Coal (ASX:WHC), closing 9.5 per cent lower at $2.37. It was followed by shares in IGO (ASX:IGO) and Champion Iron (ASX:CIA).

Asian markets

Japan's Nikkei has lost 0.6 per cent.
Hong Kong's Hang Seng has gained 0.7 per cent.
China's Shanghai Composite has lost 0.7 per cent.

Commodities and the dollar

Gold is trading at US$1793.65 an ounce.
Light crude is trading $0.12 lower at US$83.93 a barrel.
One Australian dollar is buying 74.95 US cents.
Iron ore is 3.2 per cent lower at US$103.30 a ton.
Iron ore futures are pointing to a fall of 9.9 per cent.

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