ASX tumbles 7.1% over the week, its worst fall since March 2020

Market Reports

by Lauren Evans

Australian shares sank again this week as recession fears continued to hit financial markets. The ASX 200 had its worst week since the pandemic started in March 2020, following another tumble on today's session.

At the closing bell, the S&P/ASX 200 was 1.8 per cent or 116 points lower at 6,475. Over the week, it closed 7.1 per cent or 457 points lower.

Selling accelerated this week amid doubts around the central banks’ ability to manage inflation after the US, UK and Switzerland were hit with an interest rate hike in the last 24 hours.

All sectors on the ASX were lower, except consumer staples up 0.6 per cent. Materials were the heaviest, down 2.8 per cent followed by technology, financials and energy.

The worst performer in the ASX 200 was GUD (ASX:GUD), down 19.6 per cent to $7.73 following an update after the market closed yesterday. The manufacturer lowered its FY22 underlying EBITA guidance to $147 million, and cited that supply chains have remained volatile, and in some cases, pressures have intensified. This was followed by Block (ASX:SQ2) down 6.5 per cent to $82.11 and HUB24 (ASX:HUB) down 7.2 per cent to $18.05.

The best performer in the ASX 200 was EML Payments (ASX:EML) up 9.4 per cent to $1.45. This was followed by Carsales.Com (ASX:CAR) up 3 per cent to $18.98 and Zip Co (ASX:ZIP) up 5.4 per cent to 53 cents.

All major banks fell. Commonwealth (ASX:CBA) dropped 3.6 per cent to $87.26, Macquarie (ASX:MQG) lost 3 per cent to $159.70, NAB (ASX:NAB) fell 1.9 per cent to $25.87, ANZ  (ASX:ANZ) declined 1.6 per cent to $21.16 and Westpac (ASX:WBC) closed 0.7 per cent lower at $19.19.

Miners fell as concerns around China’s zero-covid policy weighed on commodities prices. Iron ore was on a six-day losing streak as Rio Tinto (ASX:RIO) dropped 5 per cent to $106.20, Fortescue Metals (ASX:FMG) fell 4.9 per cent lower at $18.67 and BHP (ASX:BHP) closed 4.3 per cent lower at $42.10.

Energy stocks fell with Santos (ASX:STO) down 3.4 per cent to $7.75, Beach Energy (ASX:BPT) down 1.8 per cent to $1.68 and Woodside Energy (ASX:WDS) down 1 per cent to $31.86.

Humm (ASX:HUM) dropped 20.9 per cent lower at 46 cents after mutually agreeing with Latitude Financial (ASX:LFS) to terminate the proposed sale of Humm’s consumer finance business, citing major disruption in financial markets. Shares in Latitude closed 3.9 per cent lower to $1.34.

In a period of high inflation, rising interest rates and growing concerns around economic growth, investors have turned to a number of defensive stocks in food production. Australian Agriculture (ASX:AAC) rallied 8.9 per cent to $2.20, Jatcorp (ASX:JAT) rose over 7 per cent to $0.015 and Costa Group (ASX:CGC) closed 2.2 per cent higher at $3.06.

Bubs Australia (ASX:BUB) also rose 9.9 per cent to 66 cents after upgrading its FY22 revenue and earnings guidance amid strong demand in China and unanticipated shortages in the US. The news helped A2 milk (ASX:A2M) rise 4.5 per cent to $4.19.

Other defensive stocks like Treasury Wine (ASX:TWE) lifted 1.3 per cent to $10.87, and Woolworths (ASX:WOW) closed 0.3 per cent higher at $33.09.

Meanwhile, gold miners finally took the spotlight, led by Evolution Mining (ASX:EVN) up 6.3 per cent to $3.72. Newcrest Mining (ASX:NST) rose 5.3 per cent to $8.61 and St Barbara (ASX:SBM) closed 4.4 per cent higher at $1.19.

Company news

Trajan (ASX:TRJ) is set to acquire Chromatography Research Supplies, a manufacturer of analytical consumables based in the US for $61.9 million (US$43.3 million). Shares were in a trading halt, and traded at $2.25 yesterday. Shares closed 0.

Link Administration (ASX:LNK) affirmed the FY22 guidance it provided in February following elevated trading in its shares over the past week. Shares closed 0.3 per cent higher at $3.36.

Vulcan Energy (ASX:VUL) provided a progress update for its zero carbon lithium project in Germany. Shares closed 5 per cent lower at $5.44.

Syrah Resources (ASX:SYR) lifted a temporary suspension on Balama logistics and personnel movements on its primary transport route in Mozambique. Shares closed 2.3 per cent lower at $1.20.

Blue Energy (ASX:BLU) completed civil works for its pilot well gas drilling program in North Bowen. Shares closed 4 per cent higher at $0.078.

Futures

The Dow Jones futures are pointing to a rise of 129.00 points.
The S&P 500 futures are pointing to a rise of 17.50 points.
The Nasdaq futures are pointing to a rise of 62.25 points.
The SPI futures are pointing to a fall of 102 points when the market next opens.

Wall Street

Over the last four trading days, the Dow Jones lost 4.9 per cent, the S&P 500 lost 6.4 per cent and the Nasdaq lost 6.5 per cent.

Asian markets

Japan's Nikkei has lost 1.77 per cent.
Hong Kong's Hang Seng has gained 0.79 per cent.
China's Shanghai Composite has gained 0.52 per cent.

Commodities and the dollar

Gold is trading at US$1846.72 an ounce.
Iron ore is 1.0 per cent lower at US$129.50 a ton.
Iron ore futures are pointing to a fall of 5.2 per cent.
Light crude is trading $0.37 lower at US$114.87 a barrel.
One Australian dollar is buying 70.01 US cents.

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