Banks weigh while energy sparks: ASX closes 1.4% lower

The Australian sharemarket fell to a four week low pulled down by banks as concerns of rising interest rates and bad debts weighed on investor sentiment. Adding to the fears were news from Shanghai about a Covid-19 lockdown in a district on Saturday, raising concerns about the city’s reopening.

At the closing bell, the S&P/ASX 200 was 1.4 per cent or 101 points lower at 7,020 to its lowest level since May 12.

Energy outperformed by 0.6 per cent while the rest of the sectors closed lower. Materials and financials led the fall by up to 2.2 per cent followed by property by 1.6 per cent. Healthcare shed the least by 0.2 per cent.

The best-performing stock in the S&P/ASX 200 is Magellan Financial Group (ASX:MFG), closing 2.2 per cent higher at $12.82 after co-founder Hamish Douglass announced that he will take a consultancy role and end being an employee of the company from next week. The worst-performer was Lifestyle Communities (ASX:LIC), closing 7.7 per cent lower at $12.54.

Major banks extended their fall. Westpac (ASX:WBC) led the decline by 3.7 per cent to $21.17 while Commonwealth Bank of Australia (ASX:CBA), National Australia Bank (ASX:NAB), and ANZ Banking Group (ASX:ANZ) fell in the range between 2.3 per cent and 2.6 per cent.

Pilbara Minerals (ASX:PLS) led the losses in the lithium sector by 5.4 per cent to $2.29. Liontown Resources (ASX:LTR) fell 4.6 per cent to $1.14 and Allkem (ASX:AKE) closed 4.2 per cent lower to $11.14.

Local economic news

Payroll jobs rose 0.2 per cent in the month to 14 May, according to the Australian Bureau of Statistics.

Company news

Blackstone’s proposed buyout of casino operator Crown Resorts (CWN) moved further after key regulatory hurdles were approved in Victoria and NSW. Shares closed 2 per cent higher to $13.

There has been a confirmation of lithium at the Lake Johnston project jointly owned by Charger Metals (ASX:CHR) and Lithium Australia (ASX:LIT). The project is being prepared for drilling. Shares in Charger Metals (ASX:CHR) closed 2.2 per cent higher to 47 cents while shares in Lithium Australia (ASX:LIT) closed flat at 8.1 cents.

The board at Race Oncology (ASX:RAC) has approved an on-market share buyback for up to four million ordinary shares over the next 12 months. The biotech is looking to take advantage of the market volatility to snap up shares in periods where the price undervalues the business. Shares closed 11.2 per cent higher to $1.88.

Syrah Resources (ASX:SYR) has received reports of an insurgent attack at a mine project in northern Mozambique. This is the second incident in the area after a period of significant security improvement. Shares closed 10.1 per cent lower to $1.38.

Fenix Resources (ASX:FEX) announced that it has entered into iron ore swap arrangements for 35,000 dry metric tonnes per month of the monthly average platts TSI 62 index converted to Australian dollars for the nine month period from October 2022 to June 2023. The price fixed is equivalent to$180.65 per dry metric tonnes, flat over the period. Shares closed 3.2 per cent higher to 3.2 cents.

Aurizon Holdings (ASX:AZJ) noted that the Australian competition and consumer commission (ACCC) has outlined preliminary competition concerns with its proposed acquisition of One Rail. The ACCC is seeking public comment on whether these concerns would be addressed by its proposed divestment of One Rail’s east coast business. Shares closed 0.5 per cent lower to $4.18.

Arena REIT’s (ASX:ARF) portfolio valuation program is expected to result in a net revaluation uplift of approximately $102 million for the six month period ending 30 June 2022. Shares closed 2.3 per cent lower to $4.21.

Chimeric Therapeutics (ASX:CHM) has established an equity funding agreement with leading global investor, L1 Capital Global Opportunities Master Fund which will further strengthen the cell therapy company’s balance sheet. The move is set to help Chimeric rapidly move forward with a portfolio of four phase one clinical trials. Shares closed at 10 cents.

Novatti Group (ASX:NOV) has announced a new Australian Dollar stablecoin on the XRP Ledger due to its scalability, speed, and low cost. This will be done in partnership with Ripple and will see Ripple providing Novatti with the technical support and tools necessary. To find out what this is all about, click here to see our interview with chief executive officer Peter Cook. Shares closed at 18 cents.
 
Futures

The Dow Jones futures are pointing to a fall of 57 points.
The S&P 500 futures are pointing to a fall of 9 points.
The Nasdaq futures are pointing to a fall of 38 points.
The SPI futures are pointing to a fall of 94 points when the market next opens.

Asian markets

Japan’s Nikkei has gained 0.2 per cent.
Hong Kong’s Hang Seng has lost almost 1 per cent.
China’s Shanghai Composite has lost 1 per cent.

Commodities and the dollar

Gold is trading at US$1851.41 an ounce.
Iron ore is 0.2 per cent lower at US$146.90 a ton.
Iron ore futures are pointing to a fall of 0.3 per cent.
Light crude is trading $0.21 higher at US$110.16 a barrel.
One Australian dollar is buying 71.69 US cents.