Tech blues weigh on miner's rally: ASX retreats 0.3% at noon

Market Reports

by Melissa Darmawan

The Australian sharemarket takes a breather after two days of gains as resources stocks help offset the fall. The improvement in mobility in the world’s second largest economy provides optimism on a light volume day as investors await cues when Wall St reopens.

The S&P/ASX 200 is 0.3 per cent or 18 points lower at 7,269. The SPI futures are pointing to a fall of 27 points.

Information tech led the declines by 1.5 per cent, followed by communication services by 1 per cent among the seven sectors in the red. Energy is up 0.5 per cent, followed by consumer staples by 0.3 per cent, then materials. Utilities are flat.

Amid the easing of restrictions in China and the European Union’s push to ban Russian oil imports, the price of crude has hit 2-month highs. This has helped Beach Energy (ASX:BPT) jump 4 per cent at $1.71 as the winner of the session.

Other top performers in the ASX 200 include, Whitehaven Coal (ASX:WHC), and Champion Iron (ASX:CIA), while in the loser’s circle, Life360 (ASX:360) tumbled 5.2 per cent at $3.62, followed by shares in Tyro Payments (ASX:TYR), and Zip Co (ASX:ZIP).

ResApp Health (ASX:RAP) has requested to be put into a trading halt to last until June 2, pending the update to the market of its proposed acquisition by Pfizer Australia. The pharmaceutical giant has expressed interest to take 100 per cent of shares in the company that developed smartphone applications for the diagnosis and management of respiratory disease.

Centuria Capital Group (ASX:CNI) has secured $223 million worth of healthcare and daily needs retail assets on behalf of existing institutional partnerships. The $1.8 billion specialist investment manager continues to unveil real estate deals under its institutional vehicle. Shares are down 0.9 per cent to $2.22.

Crown Resorts (ASX:CWN) has been hit with a $80 million fine from the Victorian Gambling and Casino Control Commission in relation to the China UnionPay process. The gaming watchdog has also indicated it continues to consider “further disciplinary proceedings against Crown related to the other findings of the Royal Commission, which may each attract a fine of up to $100 million.”  Shares are down 0.3 per cent to $12.87. 

Kalium Lakes (ASX:KLL) continues to soar, up 19.3 per cent to 10.5 cents after the company provided an update to its operational status at its Beyondie sulphate of potash project.

Mighty Kingdom (ASX:MKL) has come off a trading halt and clarified its announcement around its partnership with Google. The contract itself is material, however, the revenue under the contract term is not material in comparison to the company’s market capitalisation. Shares tumbled 12.3 per cent to 6.4 cents.

Meanwhile, Macquarie Group (ASX:MQG) outperforms the banking circle again, up 0.9 per cent at $189.73 while ANZ Banking Group (ASX:ANZ) weighs, down 1.1 per cent at $25.49.

Local economic news

Australia's current account surplus decreased by $5.7 billion to $7.5 billion, seasonally adjusted in the March quarter. While the total number of dwellings approved fell 2.4 per cent in seasonally adjusted terms in April, following a 19.2 per cent fall in March, according to the Australian Bureau of Statistics.

China's monthly purchasing managers index (PMI) data remains in "contraction" territory as the figures came in below 50. Anything above 50 indicates expansion.

Official China manufacturing PMI was 49.6 in May, ahead of consensus 49.0, rebounding sharply from the post pandemic low of 47.4 in the previous month. The recovery was driven by production, new orders, supplier delivery times, and exports to a lesser extent.

Finished goods inventories fell back into contraction after a brief increase in April with input price inflation eased, though remained elevated, while output prices declined for the first time in five months. Large firms returned to growth, while medium and small enterprises indicated smaller contraction.

Non-manufacturing PMI was 47.8 vs consensus 45.0 and prior 41.9. Services bounced sharply, though remained in contraction. The expansion in construction moderated somewhat while inflation indexes indicated softer increases in input price as well as declines in output prices. The composite PMI recovered to 48.4 from 42.7, though remains slightly below the March level of 48.8.

Best and worst performers

The best-performing sector is Energy, up 0.5 per cent. The worst-performing sector is Information Technology, down 1.3 per cent.

The best-performing stock in the S&P/ASX 200 is Beach Energy (ASX:BPT), trading almost 4 per cent higher at $1.71. It is followed by shares in Whitehaven Coal (ASX:WHC) and Champion Iron (ASX:CIA).

The worst-performing stock in the S&P/ASX 200 is Life360 (ASX:360), trading 5.2 per cent lower at $3.62. It is followed by shares in Tyro Payments (ASX:TYR) and Zip Co (ASX:ZIP).

Commodities and the dollar

Gold is trading at US$1848.28 an ounce.
Iron ore is 1.6 per cent higher at US$136.60 a ton.
Iron ore futures are pointing to a rise of 2.7 per cent.
One Australian dollar is buying 71.80 US cents.

Sources: Bloomberg, FactSet, Australian Bureau of Statistics

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