China scares commodity investors: ASX closes 1.1% lower over the week

Australian stocks snapped a three-day winning streak as a fall in the heavyweight miners offset gains from the defensive sectors. The materials sector tumbled for its sixth straight session as investors assessed China’s efforts to control Covid-19 cases while unveiling slow GDP growth.

At the closing bell, the S&P/ASX 200 was 0.7 per cent or 45 points lower at 6,606. Over the week, it closed 1.1 per cent or 72 points lower.

A rise in US equity futures and a breather in the US-dollar surge were far from enough to arrest the decline on the index.

Materials tumbled 3.2 per cent and communication services fell 0.4 per cent, while energy, financials, industrials and consumer discretionary fell up 0.7 per cent each. Consumer staples and healthcare both added 1 per cent. The other sectors rose up to 0.8 per cent.

Zip Co (ASX:ZIP) took out first place on the ASX 200, soared 5.6 per cent to 57 cents as investors continued to mull on the news around the abandoned merger with Sezzle (ASX:SZL). Pendal Group (ASX:PDL) fell to the last place on the leaderboard, tumbling 7.8 per cent to $3.76 after net outflows accelerated in its latest results.

At a deeper level across the iron ore miners, the price of steel-making ingredient fell to an 8-month low as default risk looms in China’s property sector. Fortescue Metals (ASX:FMG) sank 6.2 per cent lower to $16.33 and BHP (ASX:BHP) fell 3.5 per cent to $36.10. However, news from Rio Tinto (ASX:RIO) didn’t help investor sentiment after the company’s share price fell 2.9 per cent to $93.27, with the miner warning that rising costs are set to weigh on its iron ore business. The miner 

As for financials and materials, Macquarie Group (ASX:MQG) led the decline across the major banks, falling 1.8 per cent to $167.99, and gold miners fell around 2.5 per cent, with Newcrest Mining (ASX:NCM) falling 2.8 per cent to $18.67.

Company news

WiseTech (ASX:WTC), a logistics technology company, upgraded its earnings guidance for financial year 2022. After achieving growth and cost efficiencies ahead of expectations, EBITDA guidance is set to land between $310 million to $320 million from $275 million to $295 million from the company’s February announcement. This represents an EBITDA growth of between 50 and 55 per cent compared to FY21. Shares closed 3.4 per cent higher at $44.13.

BCI Minerals’ (ASX:BCI) managing director and chief executive officer (CEO), Alwyn Vorster has put in his resignation to step down by the end of the year. Mr Vorster has been in the role for more than six years and will be pursuing non-executive advisory roles, following his departure. The news comes a week after flagging higher costs and delays at the company’s flagship Mardie salt and potash project in Western Australia. The search for a new CEO is underway. Shares closed 6.3 per cent lower at 22.5 cents.
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Jumbo Interactive (ASX:JIN) has provided a double digit percentage uplift across its key metrics in its preliminary financial year 2022 results. The digital lottery company expects net profit to jump 16 per cent to $31.6 million, total transaction value to grow by 36 per cent to $660.1 million, revenue to climb 27 per cent to $103.8 million and EBITDA to be higher by 14 per cent to $54 million off the back of an improved jackpot cycle. Shares closed 15 per cent lower at $12.31.

Michael Hill (ASX:MHJ) has posted record sales and improved margins for the 2022 financial year. All store sales were up 17 per cent and same store sales were up 2.1 per cent over the year. Shares closed 3.7 per cent higher at $1.12.

carsales.com (ASX:CAR) has completed the retail component of its non-renounceable entitlement offer and raised around $183 million. The funds were raised through the issue of approximately 10.3 million new shares at a price of $17.75 per share. The offer had a 51 per cent take up and 10.1 million shares balance is set to be allocated to the sub-underwriters.
Shares are expected to settle on July 19, be allocated on July 20 and begin trading on the ASX on July 21. Shares closed 4.3 per cent lower at $18.50.

Futures

The Dow Jones futures are pointing to a rise of 17 points.
The S&P 500 futures are pointing to a rise of 4 points.
The Nasdaq futures are pointing to a rise of 30 points.
The SPI futures are pointing to a fall of 43 points when the market next opens.

Asian markets

Japan’s Nikkei has gained 0.6 per cent.
Hong Kong’s Hang Seng has lost almost 2 per cent.
China’s Shanghai Composite has lost 0.9 per cent.

Wall Street

Over the last four trading days, the Dow Jones lost 2.3 per cent, the S&P 500 lost 2.9 per cent and the Nasdaq lost 3.4 per cent.

Commodities and the dollar

Gold is trading at US$1707.02 an ounce.
Iron ore is 8.4 per cent lower at US$100.25 a tonne.
Iron ore futures are pointing to a fall of 7.9 per cent.
Light crude is trading $0.28 lower at US$93.27 a barrel.
One Australian dollar is buying 67.35 US cents.