Commodity prices drags resources giants lower: ASX closes 0.3% lower

The Australian sharemarket fell as weakness in the commodity markets dragged the resources giants lower amid a raft of AGM’s and trading updates. At the closing bell, the S&P/ASX 200 was 0.3 per cent or 18 points lower at 7,430, it’s first decline since Tuesday’s session last week.

The nation’s third largest bank ANZ (ASX:ANZ) closed 0.7 per cent higher at $28.60 after posting a better than expected earnings update for its second-half of the financial year 2021 period. Westpac (ASX:WBC) led out of the major four adding 1.1 per cent at $26.23 ahead of their financial year 2021 results on Monday next week.

Fortescue Metals (ASX:FMG) outperformed its mining peers after posting record quarterly shipments. However, the iron ore miner received less per tonne due to a fall in commodity prices in the September quarter. It closed 0.1 per cent higher at $14.02. BHP (ASX:BHP) fell 1.1 per cent while Rio Tinto (ASX:RIO) closed 1.5 per cent lower. Outside of the major players, Alumina (ASX:AWC) sank 4.7 per cent, South32 (ASX:S32) dived 4.0 per cent while OZ Minerals (ASX:OZL) closed 2 per cent lower.

Oil prices tumbled over 2.0 per cent after Iran and the European Union agreed to resume talks on the 2015 nuclear accord. Meanwhile, China’s decision to monitor surging coal prices dragged stocks with the likes of Whitehaven Coal (ASX:WHC) tumbling 5.0 per cent at $2.69.

Woodside Petroleum (ASX:WPL) sank 2.5 per cent to $23.67, Santos (ASX:STO) dropped 1.9 per cent to $7.09 while Beach Energy (ASX:BPT) closed 2.8 per cent lower to $1.39.

Newcrest Mining (ASX:NCM) bucked the trend adding 0.8 per cent at $25.56 after investors digested the upbeat gold production and its Cadia mine in NSW. They shrugged off the performance at its Lihir operation in Papua New Guinea.

Reliance Worldwide (ASX:RWC) continued to rally to be the best performer for the session. Investors continued to mull on the plumbing parts company’s benefit from acquiring EZ-FLO after several brokers upgraded its rating and target price for the company yesterday. To find out what Macquarie said, click here.

Boral (ASX:BLD) jumped 4.6 per cent at $6.61 after the building materials producer over-estimated the impact of costs and concrete volumes due to the lockdowns during the September quarter. Investors piled back after they realised the difference it would make to the top line.

Reece (ASX:REH) was the index’s third best performer after the company posted a 13.2 per cent surge in sales revenue to $1.8 billion in the first quarter of financial 2022. The plumbing parts supplier said that jump was driven by strong growth across its US business.

Pointsbet Holdings (ASX:PBH) was the worst performer after its September-quarter trading update came in below expectations. The online bookmaker revealed that its market share in the US fell led by New Jersey, its most largest and established market.

Coles (ASX:COL) added 0.1 per cent at $17.36 despite its September-quarter sales growth falling below expectations. Investors appeared to have focused on its outlook for hope which was a stark contrast to Woolworth’s tumble after they released results yesterday. Woolworths (ASX:WOW) closed 1.0 per cent lower at $38.76.

Investors were a bit more cautious as Asian markets trades lower after being rattled by the US-China tension. Wall St is set to release further earnings with the September economic growth figures due. Also on the docket are pending home sales and weekly initial jobless claims.

Local economic news

The Australian Bureau of Statistics released import and export figures for the September quarter. Exports rose 6.2 per cent while imports grew 5.4 per cent during the period.

The biggest contributors were coal, coke and briquettes, thanks to surging global demand for thermal and coking coals. Gas, natural and manufactured were the second group of contributors due to the rise in oil-linked contracts capturing the continued oil price rises this year.

Company news

Join me for Stocks of the Hour here where I cover ANZ (ASX:ANZ), Fortescue Metals (ASX:FMG) and JB Hi-Fi (ASX:JBH)

Broker moves

Credit Suisse upgraded A2 Milk (ASX:A2M) to a neutral from an underperform with a raised target price of $5.75.

The broker’s rate hike reflected the rising English label sales and bullish market share targets for China. However, Credit Suisse notes that the total market is weak, and risk remains despite the company’s ambitious outlook. The slowdown in newborns and tightening government regulation is also a concern. Despite this, analysts believe that most of this has already been priced in. Target price rises to $5.75 from $5.50

Shares in A2 Milk (ASX:A2M) closed 1.6 per cent higher at $6.13.

Futures

The Dow Jones futures are pointing to a rise of 58 points.
The S&P 500 futures are pointing to a rise of 9 points.
The Nasdaq futures are pointing to a rise of 37 points.
The SPI futures are pointing to a fall of 18 points when the market next opens.

Best and worst performers

The best-performing sector was Financials, up 0.2 per cent. The worst-performing sector was Energy, down 1.9 per cent.

The best-performing stock in the S&P/ASX 200 was Reliance Worldwide (ASX:RWC), closing 5.2 per cent higher at $5.72, followed by shares in Boral (ASX:BLD) and Reece (ASX:REH).

The worst-performing stock in the S&P/ASX 200 was PointsBet Holdings (ASX:PBH), closing 18.3 per cent lower at $8.63, followed by shares in IOOF Holdings (ASX:IFL) and Nickel Mines (ASX:NIC).

Asian markets

Japan’s Nikkei has lost 0.8 per cent.
Hong Kong’s Hang Seng has lost 0.04 per cent.
China’s Shanghai Composite has lost 0.8 per cent.

Commodities and the dollar

Gold is trading at US$1800.55 an ounce.
Iron ore is 2.0 per cent lower at US$119.86 a ton.
Iron ore futures are pointing to a fall of 6.1 per cent.
Light crude is trading $1.41 lower at US$81.25 a barrel.
One Australian dollar is buying 75.05 US cents.