Commodities fall puts ASX on track for worst session in 2-months, down 2% at noon

Market Reports

by Melissa Darmawan

The local bourse is heading for its worst session in two months roiled by anticipated weaker demand, following China extending its Covid-19 lockdown after its outbreak spreading from Shanghai to now Beijing. The index sank as much as 2.4 per cent as catch up trading resumed after a three-day break. Miners and energy stocks plunge leading to big losses across the board with not one sector bucking the trend, however on a positive note, there are a few stock standouts worth calling out.

At noon, the S&P/ASX 200 is 1.9 per cent or 139.50 points lower at 7,334. The SPI futures are pointing to a fall of 25 points.

Miners and energy stocks lead declines

The tumble has put Australian shares on track for its worst session since February 24 and is having its worst two days of trading since late January. The materials sector fell 4.8 per cent as the price of iron ore dropped by 10 per cent to its lowest level since late February.

Fortescue Metals (ASX:FMG) is leading the fall by 6.5 per cent to $19.85, BHP (ASX:BHP) is down 5.4 per cent to $45.88, Rio Tinto (ASX:RIO) is behind by 4.1 per cent at $109.03, while South32 (ASX:S32) had taken a nosedive of 7.8 per cent to $4.46

The energy sector isn’t looking too pretty, falling 3.7 per cent as a group with Woodside Petroleum (ASX:WPL) down 5.3 per cent to $30.35 and Santos (ASX:STO) down 4.3 per cent to $7.80.

Green shoots?

Endeavour Group (ASX:EDV) runs higher for a second straight session, Appen (ASX:APX) jumped 1.5 per cent amid a regulatory filing outlining details of shareholders in the company with 10-year Australian treasury yield falling 7 basis points giving some reprieve to technology names.

Meanwhile EML Payments (ASX:EML) continues to fall to its lowest level in two years after downgrading its revenue and earnings forecasts for the full year, cratering 35.6 per cent to $1.74 while all the big banks are down with NAB falling the most by 1.2 per cent at $32.76.

Stocks on watch

In terms of companies to watch, Ansell (ASX:ANN) is set to shut its factory in Russia in June, a year after it opened the plant in the wake of the Russian invasion of Ukraine as it takes the final steps towards ending its business in Russia, where it had a market share in higher-end medical gloves of up to 80 per cent, according to the AFR. Shares are up 1.7 per cent to $26.60.

The bidding war continues with AMP (ASX:AMP) amid Mirvac Group now in advanced talks with investors to take control of AMP Capital’s flagship office fund, in a deal slated to occur in parallel with Dexus’ wider move on AMP’s asset management arm, according to the AFR. Shares are down 1.7 per cent to $1.03.

If you’re into NFT’s, non fungible tokens which are smart contracts tied to digital goods by way of a QR code that’s all recorded on a blockchain, Treasury Wine (ASX:TWE) shares are edging lower by 0.2 per cent to $11.12 amid reports from Bloomberg that luxury wine makers are betting on NFTs.

Online church giving provider Pushpay Holdings (ASX:PPH) has received unsolicited, non-binding and conditional takeover offers. The church donor management technology company, which had a market value of $1.1 billion before, has been growing its revenue and net profits solidly over the past four years. Shares have catapulted 19.3 per cent higher to $1.14.

Asian stocks rebound, big tech set to report on Wall St

Looking abroad, the sell-off has continued as investors sell off on concerns about what it means to the already choked supply chain and the impact on inflation in the world’s second-largest economy. Stocks in China had a rocky start to trade and is holding onto its gains, up 0.6 per cent while the Hang Seng is on the move, up 1.8 per cent after tumbling more than 3 per cent in the previous session.

As we approach the end of April, we head into the season of "sell in May and go away" with traders hopeful for a much nicer month. April is proving to be ugly across several asset classes, exacerbated by the moves in China amid a medley of hawkish Fed speak. Bonds and currencies are selling off and the equity market is capitulating with currency couples like the yen and the yuan growing wider against the greenback. All this ahead of big tech earnings this week on Wall St as investors hope that results could buck the pain this month.

Broker moves

Join me here as we go through a deep dive on the coal miners on the ASX and what analysts think of Whitehaven Coal (ASX:WHC) and Terracom (ASX:TER)

Best and worst performers

All sectors are in the red. The sector with the fewest losses is real estate investment trusts, down 0.4 per cent. The worst-performing sector is materials, down 4.8 per cent.

The best-performing stock in the S&P/ASX 200 is Block (ASX:SQ2), trading 2.3 per cent higher at $149.40. It is followed by shares in Virgin Money UK (ASX:VUK) and Appen (ASX:APX).

The worst-performing stock in the S&P/ASX 200 is EML Payments (ASX:EML), trading 35.6 per cent lower at $1.75. It is followed by shares in Sims (ASX:SGM) and Chalice Mining (ASX:CHN).

Commodities and the dollar

Gold is trading at US$1900.69 an ounce.
Iron ore is 9.8 per cent lower at US$135.75 a ton.
Iron ore futures are pointing to a fall of 2.7 per cent.
One Australian dollar is buying 71.85 US cents.

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