Banks soften, BHP & Rio drag, a2 Milk jumps 5%: ASX closes 0.1% lower

The Australian sharemarket became weaker in the afternoon session as major miners weighed and financials softened. At the closing bell, the S&P/ASX 200 was 0.1 per cent or 6 points lower at 7,375.

Sectors became mixed in the last hour of trade, with only 5 out of eleven sectors closing in the green. Technology was the clear winner up, up 1.6 per cent, followed by real estate, up 1.4 per cent, then consumer discretionary, up 0.8 per cent. Materials were the biggest drag, down 1.4 per cent, then communication services, down 0.4 per cent, while energy, financials, industrials and utilities all edged lower.

The best-performing stock was the a2 Milk Company (ASX:A2M), closing 5.3 per cent higher. The worst-performing stock was Westfield shopping centre owner Unibail-Rodamco-Westfield (ASX:URW), closing 5.7 per cent lower.

Major banks fell lower in the afternoon, led by NAB (ASX:NAB) closing 0.3 per cent lower. Insurance companies QBE insurance (ASX:QBE) and Suncorp (ASX:SUN) also closed 1.5 and 1.4 per cent lower and Virgin Money (ASX:VUK) closed 4.3 per cent lower.  

Major miners weighed heavily today, with BHP (ASX:BHP) closing 1.9 per cent lower on lower iron ore production results, and Rio Tinto (ASX:RIO) and Fortescue (ASX:FMG) following, closing 3.1 and 1.2 per cent lower. Chalice Mining (ASX:CHN) closed 3.7 per cent lower and Codan (ASX:CDA) closed 4.3 per cent lower. Energy giant Woodside Petroleum (ASX:WPL) also closed 1.2 per cent lower, with Santos (ASX:STO) and Oil Search (ASX:OSH) falling behind them. 

Gambling stocks were among the losses, with Tabcorp (ASX:TAH) closing 2.6 per cent lower, following its annual meeting today, where the company discussed the impact of restrictions on its wagering division, while Crown Resorts (ASX:CWN) also closed 2.6 per cent lower. Telstra (ASX:TLS) closed 1 per cent lower. 

On a brighter note, buy now, pay later giants Afterpay (ASX:APT) and Zip (ASX:ZIP) closed 2.7 and 5 per cent higher. Tech stocks Xero (ASX:XRO) and WiseTech (ASX:WTC) both closed 2 per cent higher. Health stocks helped the ASX, with CSL (ASX:CSL) closing 0.7 per cent higher on the day of its annual research and development day.

Local economic news

The Reserve Bank said the Delta outbreak of Covid-19 disrupted the economic recovery, however, expects the setback to be transitory amid the rising vaccination rates. The central bank said that the December quarter would see the country return to growth at a slower pace when compared to last year and early this year.

The minutes also said that the members agreed, “while less accommodative monetary policy would, all else equal, see lower housing prices and credit growth, it would result in fewer jobs and lower wages growth, which would in turn create further distance from the goals of monetary policy – namely, full employment and inflation sustainably within the target range.”

The board’s view of keeping interest rates at record will continue until 2024. For the full minutes, click here.

The weekly consumer confidence from ANZ and Roy Morgan was released this morning. Consumer Confidence was up for the sixth straight week, up by 1.4 points to 107 in mid-October. However, consumer confidence remains below the 2021 weekly average of 108.3 but is now 8.9 points higher than the same week a year ago, October 17/18, 2020 (98.1).

Consumer confidence this week was up in Sydney following the end of the city’s 106-day lockdown and also increased in Melbourne with the news that the lockdown would soon be ending, and in Brisbane after that city avoided a lockdown despite concerns about a handful of cases.

Driving this week’s small increase was increasing confidence about the year ahead with more Australians expecting to be ‘better off’ this time next year and more Australians expecting ‘good times’ for the Australian economy over the next year.

Company news

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Mining giant BHP (ASX:BHP) reported a softer iron ore output while reassuring investors that the merger with Woodside Petroleum (ASX:WPL) is going ahead. The news was underpinned by the financial year 2022 guidance remaining unchanged.

Stockland (ASX:SGP) maintained momentum in its residential and commercial sales during the September quarter (Q122) while reconfirming its FY22 guidance, despite ongoing Covid-19 disruptions.

Northern Star Resources (ASX: NST) has reported a drop in gold production for the three months ending 30 September 2021, but remains on track to meet its FY22 guidance.

Global engineering provider Worley (ASX:WOR) has been awarded a services contract from Shell Nederland Raffinaderij to support the development of a low-carbon fuels facility at the Shell Energy and Chemicals Park Rotterdam in the Netherlands.

Futures

The Dow Jones futures are pointing to a fall of 19 points.
The S&P 500 futures are pointing to a fall of 0.3 points.
The Nasdaq futures are pointing to a fall of 4 points.
The SPI futures are pointing to a fall of 9 points when the market next opens.

Best and worst performers

The best-performing sector was Information Technology, up 1.6 per cent. The worst-performing sector was Materials, down 1.4 per cent.

The best-performing stock in the S&P/ASX 200 was The A2 Milk Company (ASX:A2M), closing 5.3 per cent higher at $6.97. It was followed by shares in Zip Co (ASX:Z1P) and Appen (ASX:APX).

The worst-performing stock in the S&P/ASX 200 was Unibail-Rodamco-Westfield (ASX:URW), closing 5.7 per cent lower at $4.78. It was followed by shares in Codan (ASX:CDA) and Chalice Mining (ASX:CHN).

Asian markets

Japan’s Nikkei has gained 0.6 per cent.
Hong Kong’s Hang Seng has gained 1.2 per cent.
China’s Shanghai Composite has gained 0.7 per cent.

Commodities and the dollar

Gold is trading at US$1774.42 an ounce.
Iron ore is 0.7 per cent lower at US$124.32 a ton.
Iron ore futures are pointing to a rise of 1.1 per cent.
Light crude is trading $0.27 higher at US$81.96 a barrel.
One Australian dollar is buying 74.57 US cents.