Banks, miners & Dominos fall: ASX drops 2% over the week

The Australian sharemarket was under pressure this afternoon and remained in negative territory as major banks weighed on the market. This came after Wall Street posted its worst monthly retreat in September since the start of the pandemic. At the closing bell, the S&P/ASX 200 was 2 per cent or 146.7 points lower at 7185.5. Over the week, it lost 2.2 per cent or 157 points.

All sectors closed in the red, led by financials, which closed 2.8 per cent lower. Real estate and consumer discretionary were next, both closing 2.5 per cent lower, followed by materials, 1.9 per cent lower. All remaining sectors closed more then 1 per cent lower. 

The best-performing stock was Whitehaven Coal (ASX:WHC), closing 4 per cent higher. The worst-performing stock was Virgin Money UK (ASX:VUK), closing 7.4 per cent lower, following its digital strategy update. 

Major banks weighed on the market, led by Commonwealth (ASX:CBA), which closed 4.2 per cent lower. Fortescue and Rio set the tone for mining stocks, with Fortescue (ASX:FMG) closing 2.8 per cent lower and Rio Tinto (ASX:RIO) closing 3.3 per cent lower, despite iron ore prices trading higher today. Energy stocks Santos (ASX:STO) and Oil Search (ASX:OSH) crumbled, closing 2.9 and 2.3 per cent lower.

Amongst the losses, gambling giant Aristocrat (ASX:ALL) closed 4.8 per cent lower while Dominos (ASX:DMP) closed 6.7 per cent lower. Health giant CSL (ASX:CSL) also fed the losses, closing 2 per cent lower. 

On a positive note, gold stocks were higher today, with Northern Star resources (ASX:NST) closing 2.5 per cent higher and Evolution Mining  (ASX:EVN) closing 2.3 per cent higher, following government approval for its underground project. Travel stocks also lifted as easing of restrictions remain on the horizon. Flight Centre (ASX:FLT) closed 1.8 per cent higher, Webjet (ASX:WEB) closed 2.2 per cent higher and Qantas (ASX:QAN) closed 0.6 per cent higher. 

Company news

Please join us for Stocks of the Hour here. 

Adelaide based cementer Adbri (ASX:ABC) has signed off on its deal to acquire the sand operations of Metro Quarry Group (MQG) in a 50/50 joint venture with Barro Group.

Medical imaging specialist Pro Medicus (ASX:PME) has inked a $40 million deal with North California health care provider Novant, marking its seventh major US contract in 18 months.

Evolution Mining (ASX:EVN) has been given government approval for its Cowal Gold Operation in NSW to develop the underground mine.

Energy supplier Santos (ASX:STO) plans to register its $210 million Moomba CCS project, after the federal government released the carbon capture and storage (CCS) method for the emissions reduction fund.

Local economic news

CoreLogic has issued its home value data for September with the headline named, “Australian housing values rising at the fastest annual pace since June 1989, but the monthly rate of growth continues to lose steam”. CoreLogic’s national home value index rose another 1.5 per cent in September, taking Australian housing values 17.6 per cent higher over the first nine months of the year and 20.3 per cent higher over the past 12 months. The annual growth rate is now tracking at the fastest pace since the year ending June 1989.

The monthly change in housing values remains positive across every capital city and broad rest of state region, with Hobart up 2.3 per cent and Canberra up 2 per cent, recording the largest growth, while Darwin is up 0.1 per cent. Perth index is up 0.3 per cent, recording the softest growth conditions across the capitals. Across regional Australia, regional NSW is up 2 per cent, regional Tasmania is up 1.7 per cent and Regional Queensland is up 1.7 per cent, led September’s capital gains.

Although growth conditions remain positive, it is becoming increasingly clear the housing market moved past its peak rate of growth in March when nationally dwelling values increased by 2.8 per cent. Since that time, the monthly rate of growth has eased back to 1.5 per cent.

AiGroup and IHS Markit released their purchasing managers’ indexes figures for the manufacturing industry. Key findings included: Demand and output shrink amid Covid-19 disruptions, lead times lengthen while prices pressures remain elevated and business confidence improves in August.

The seasonally adjusted IHS Markit manufacturing purchasing managers’ indexTM posted 52 in August, down from 56.9 per cent in July, to signal the fifteenth consecutive month of expansion. The rate of growth eased for the third consecutive month, however, and was below the survey average.

Australian Bureau of Statistics released their lending indicators for August, for new borrower-accepted finance commitments for housing, personal and business loans. In August it fell, 4.3 per cent for housing, 2.5 per cent for personal fixed term loans and 26.4 per cent for business construction.

IPO 

West Cobar Metals (ASX:WC1) made their debut today on the ASX with an issue price of $0.20. The stock opened at $0.24, traded at $0.23 at lunchtime and closed flat at $0.22. 

Futures

The Dow Jones futures are pointing to a fall of 160 points.
The S&P 500 futures are pointing to a fall of 19 points.
The Nasdaq futures are pointing to a fall of 67 points.
The SPI futures are pointing to a fall of 150 points when the market next opens.

Best and worst performers

All sectors closed in the red. The sector with the fewest losses was Utilities, down 0.05 per cent. The worst-performing sector was Financials, down 2.8 per cent.

The best-performing stock in the S&P/ASX 200 was Whitehaven Coal (ASX:WHC), closing 4 per cent higher at $3.36. It was followed by shares in Silver Lake Resources (ASX:SLR) and AMP (ASX:AMP).

The worst-performing stock in the S&P/ASX 200 was Virgin Money UK (ASX:VUK), closing 7.4 per cent lower at $3.74. It was followed by shares in Mineral Resources (ASX:MIN) and Domino Pizza Enterprises (ASX:DMP).

Asian markets

Japan’s Nikkei has lost 2.3 per cent.
Hong Kong’s Hang Seng is closed due to National Day.
China’s Shanghai Composite is closed due to China National Day.

Wall Street

Over the last four trading days, the Dow Jones lost 2.8 per cent, the S&P 500 lost 3.4 per cent and the Nasdaq lost 4.2 per cent.

Commodities and the dollar

Gold is trading at US$1754.68 an ounce.
Iron ore is 4.5 per cent higher at US$119.23 a ton.
Iron ore futures are pointing to a rise of 5.4 per cent.
Light crude is trading $0.18 lower at US$74.85 a barrel.
One Australian dollar is buying 71.94 US cents.

Public holiday weekend (for some states)

On Monday, there will only be a text report for the day. See you on Tuesday morning!