Materials firm as ASX falls for second day, closing 0.8% lower

The Australian sharemarket carried its losses through the afternoon session as consumer staples and banks continued to weigh, while the technology sector failed to hold onto gains and also closed lower. At the closing bell, the S&P/ASX 200 was 0.8 per cent or 57 points lower at 7,390.

Consumer staples were the worst-performing sector, weighed down by Inghams (ASX:ING) after the chicken producer felt the pain from the Omicron wave across the east side of the country. Staff shortages have put downward pressure on sales performance and led to several products being suspended amid the supply chain disruptions. Shares closed 6 per cent lower. 

Supply chain concerns and staff shortages dragged on retailers as the Omicron wave continues to dent consumer sentiment and spend. Coles (ASX:COL) lost 2.5 per cent, Woolworths (ASX:WOW) closed 2.1 per cent lower and Wesfarmers (ASX:WES) was down 1.4 per cent. Elsewhere, JB Hi-Fi (ASX:JBH) shed 0.6 per cent, while Harvey Norman (ASX:HVN) closed 0.2 per cent lower.

Financials were the third worst performer as major banks weighed. Commonwealth Bank (ASX:CBA) closed 1.5 per cent lower and Macquarie (ASX:MQG) fell 1.4 per cent with ANZ (ASX:ANZ) not far behind, closing 1.3 per cent lower. Westpac (ASX:WBC) dipped 0.7 per cent, while NAB Bank (ASX:NAB) closed 0.5 per cent lower.

Afterpay (ASX:APT) and Zip Co (ASX:Z1P) held onto gains, closing 1.7 and 1.8 per cent higher, while Xero (ASX:XRO) fell 1.2 per cent and weighed on the tech sector. 

Materials were the bright spot despite a mixed close. BHP (ASX:BHP) lost 0.3 per cent, while Rio Tinto (ASX:RIO) added 0.4 per cent and Fortescue Metals (ASX:FMG) surged 2.3 per cent. In the broader resources space, Santos (ASX:STO) tumbled 1.5 per cent while Woodside Petroleum (ASX:WPL) rallied 0.7 per cent.

Gold stocks rallied after investors sought refuge in the precious metal as an inflation hedge. Evolution Mining (ASX:EVN) jumped 2.7 per cent, St Barbara (ASX:SBM) added 1.9 per cent and Newcrest Mining (ASX:NCM) closed 0.8 per cent higher.

Local economic news

The Australian Bureau of Statistics (ABS) posted retail sales rising 7.3 per cent in November, seasonally adjusted from 4.9 per cent a month before versus expectations of 3.8 per cent.

Meanwhile, the balance of goods and services surplus fell $1,4 billion to $9.5 billion in November versus expectations of $10.6 billion with imports up 6 per cent to $43.859 billion while exports grew 2 per cent to $34.436 billion according to the ABS.

ANZ-Roy Morgan consumer confidence dropped 2.4 points to 106.0 during the first week of January, and is now 2.9 points below the same week a year ago. The small drop in sentiment follows a surge in Omicron cases over the last few weeks causing many problems for businesses with staff forced to isolate. The surge in cases has likely contributed to the small decline in sentiment which normally increases to start the new year.

Company news

Sales in biotech giant PolyNovo (ASX:PNV) have surged 45 per cent to $16.3 million from a year ago, led by encouraging sales in the US. The company is now focusing on initiatives in markets outside the US after describing its sales performance as “patchy”. Shares skyrocketed 25.2 per cent to close at $1.79.

Liontown Resources (ASX:LTR) are in trading halt pending an announcement. The move comes after they inked a deal yesterday for a contract worth $10 million for its Kathleen Valley Lithium Project in WA. Shares last traded at $1.55.

Chicken producer Inghams (ASX:ING) has felt the pain from the Omicron wave across the east side of the country with staff shortages putting downward pressure on its sales performance. Shares closed 6 per cent lower at $3.32.

Online wagering giant PointsBet (ASX:PBH) has joined the NHL Alumni Association (NHLAA) as their exclusive sports betting partner in Canada and official partner in the US. Shares closed 3.5 per cent higher at $6.43.

NHS England has extended its deal with Ramsay Health Care (ASX:RHC) on a new volume-based agreement to meet ongoing demands due to the Covid-19 pandemic. Shares closed 0.5 per cent higher at $65.57.

Vulcan Energy (ASX:VUL) has signed an agreement with European chemical producer Nobian for the development of a lithium plant. Shares closed 0.7 per cent lower at $10.03.

Futures

The Dow Jones futures are pointing to a rise of 10 points.
The S&P 500 futures are pointing to a rise of 2 points.
The Nasdaq futures are pointing to a rise of 4 points.
The SPI futures are pointing to a fall of 41 points when the market next opens.

Best and worst performers

The best-performing sector was Materials, up 0.03 per cent. The worst-performing sector was Consumer Staples, down 2.1 per cent.

The best-performing stock in the S&P/ASX 200 was PolyNovo (ASX:PNV), closing 25.2 per cent higher at $1.79. It was followed by shares in Alumina (ASX:AWC) and Regis Resources (ASX:RRL).

The worst-performing stock in the S&P/ASX 200 was ARB Corporation (ASX:ARB), closing 12.3 per cent lower at $46.32. It was followed by shares in Novonix (ASX:NVX) and Inghams Group (ASX:ING).

Asian markets

Japan’s Nikkei has lost 0.9 per cent.
Hong Kong’s Hang Seng has gained 0.4 per cent.
China’s Shanghai Composite has lost 0.1 per cent.

Commodities and the dollar

Gold is trading at US$1806.59 an ounce.
Iron ore is 0.7 per cent lower at US$127.30 a ton.
Iron ore futures are pointing to a rise of 1.9 per cent.
Light crude is trading $0.57 higher at US$78.27 a barrel.
One Australian dollar is buying 71.85 US cents.