Property, tech & materials weigh: ASX closes 1.2% lower

The Australian sharemarket spent Monday’s session in negative territory after a decline on Wall Street sent Aussie shares tumbling. The local bourse was weighed down by property, which fell 4.2 per cent, followed by information tech, down 3.2 per cent, then materials, down 2.1 per cent. Despite a broad-based decline, some energy, consumer, and healthcare players were bucking the trend as investors bought into companies that perform well in high-inflation, low-growth environments.

At the closing bell, the S&P/ASX 200 was 1.2 per cent or 85 points lower at 7,121.

Weighing on the property sector was Goodman Group (ASX:GMG), down 7 per cent to $19.16, followed by Mirvac Group (ASX:MGR), down by 5.8 per cent to $2.13, while Novonix (ASX:NVX) led the tech space lower, down 12.3 per cent to $4.06.

Heavyweight miners like BHP (ASX:BHP) fell 1.5 per cent to $46.10 amid a tumble in the iron ore price as China’s zero-Covid policy stoked concerns. Rio Tinto (ASX:RIO) tumbled 2.6 per cent to $106.43 and Fortescue Metals (ASX:FMG) closed 5.8 per cent lower at $19.63.

Despite the gold price closing higher on Friday, the price of the inflation hedge metal posted a third straight week of declines, with Northern Star (ASX:NST) down 3.8 per cent to $9.06 and Evolution Mining (ASX:EVN) down 3.7 per cent to $3.67

In terms of energy stocks, Woodside Petroleum (ASX:WPL) lifted 0.2 per cent to $31.44, Santos (ASX:STO) added 0.3 per cent to $8.07 and Beach Energy (ASX:BPT) closed 0.3 per cent higher at $1.66.

Despite the local bourse in negative territory, there were several companies that lifted. Westpac (ASX:WBC) rose 3.2 per cent to $24.60 after posting a positive earnings beat, Polynovo (ASX:PNV) jumped 3.3 per cent to $0.93, CSL (ASX:CSL) lifted 0.7 per cent to $269.96, Whitehaven Coal (ASX:WHC) rose 2.3 per cent to $5.06, TPG Telecom (ASX:TPG) added 2.2 per cent to $5.69 following its $950 million divestment, and Brainchip (ASX:BRN) soared 15.1 per cent to $1.22.

Major banks were mixed behind Westpac’s (ASX:WBC) rally. Commonwealth Bank (ASX:CBA) added 0.3 per cent to $102.66 and National Australia Bank (ASX:NAB) lifted 0.2 per cent to $31.68, while ANZ Banking (ASX:ANZ) declined 2.7 per cent to $26.03 and Macquarie Group (ASX:MQG) closed 2.6 per cent lower at $182.00.

Elsewhere, News Corp (ASX:NWS) received several price target downgrades, weighing on the share price as it tumbled 9.7 per cent to $24.02. Macquarie assessed the company’s third quarter results and cited that it was in line with its own forecasts. However, when the broker compared the results against two other consensus estimates, one was met while the other one was missed, sending the share price lower. Despite an upgrade to earnings per share estimates largely due to lower-than-expected News Media costs, the analyst lowered its target price by 10 per cent to $45 and retained its outperform rating.

Company news

Westpac (ASX:WBC) reported first half cash earnings of $3.1 billion versus the Bloomberg consensus of $2.9 billion, a beat of 6.9 per cent. Statutory profit was 5 per cent weaker at $3.3 billion compared to the prior corresponding period. The nation’s oldest bank is set to pay an interim franked dividend of 61 cents per share on 25 June, up from the 58 cents payout in the prior period. Shares closed 3.2 per cent higher at $24.60.

Magellan Financial (ASX:MFG) is set to sell its 11.6 per cent stake in Mexican fast food chain Guzman Y Gomez to a Barrenjoey entity, with the intention of seeding an investment trust for $140 million. Magellan expects to record a pre-tax profit on the sale of $34 million in FY22, while the upfront sale price represents a 36.3 per cent premium to Magellan’s entry price in January last year. Magellan said the funds will be used to support its ongoing “capital management initiatives.” Shares closed 9.2 per cent lower at $15.67.

UK insurance broker Tysers received an $880 million offer from AUB Group (ASX:AUB) and unveiled a $350 million equity raising to fund the deal. In other takeover news, AUB is on a roll with another deal that they’ve embarked on with PSC Insurance (ASX:PSI). The duo is set to acquire a 50 per cent stake in Tysers’ UK Retail division with both transactions set to increase the AUB’s global footprint. Shares in AUB Group (ASX:AUB) closed 0.9 per cent lower at $22.15, while PSC Insurance (ASX:PSI) closed 1.8 per cent higher at $4.62.

TPG Telecom (ASX:TPG) is set to sell its mobile tower and rooftop infrastructure to Canadian investor OMERS Infrastructure Management for an enterprise value of $950 million. TPG anticipated that the transaction will deliver net cash proceeds of around $890 million, the enterprise value less total transaction costs, which the company expects to use to repay existing bank debt. Shares closed 2.2 per cent higher at $5.69.

Viva Energy (ASX:VEA) said total group volumes during the March quarter rose 9 per cent from the same period a year ago, driven by strong diesel sales within the commercial businesses. On the other hand, Viva noted that retail fuel sales were impacted by reduced mobility from the Omicron variant and flooding events across NSW and Queensland. Shares closed 0.6 per cent lower at $2.72.

The Star Entertainment Group (ASX:SGR) resolved to immediately suspend rebate programs for both domestic and international players across all its casinos until further notice as it addresses issues arising from the ongoing review of its Sydney operations. The decision to suspend rebate programs is not expected to have any material impact on earnings for FY22. Shares closed 1.6 per cent lower at $2.99.

Suncorp’s (ASX:SUN) home lending portfolio during the March quarter grew 1.7 per cent, with total lodgements 21 per cent higher than the second quarter of FY22 driven by consistent competitive offering and improved turnaround times. Business lending grew 0.8 per cent, while commercial lending growth was $122 million. Shares closed 0.5 per cent lower at $11.25.

BetMakers Technology (ASX:BET) announced that Fixed Odds betting on Thoroughbred Racing has launched in New Jersey under the landmark legislation passed on June 21 last year. The company will continue to engage with existing US online sportsbook operators looking to include Horse Racing as a part of their wagering offering. Shares closed 5.1 per cent lower at $0.46.

Oceania Healthcare (ASX:OCA) is set to acquire two NZ-based retirement villages Remuera Rise and Bream Bay for NZ$57 million. Oceania has also entered into an option agreement to acquire 6.7 hectares of greenfield development land adjacent to Bream Bay Village. Oceania said it’s committed to providing critical infrastructure for New Zealand’s ageing population. Shares last traded at $0.88.

What else was on watch today?

JPMorgan cut both Charter Hall Long Wale REIT (ASX:CLW) to neutral with a price target of $5.20, with shares down 2.1 per cent to $4.80, and GPT Group (ASX:GPT) to underweight with a price target of $5.20, with shares down 4.3 per cent to $4.73.

Morgan Stanley cut Centuria Office REIT (ASX:COF) equal weight from overweight, with shares down 5.2 per cent to $2.02.

REA Group (ASX:REA) received two broker upgrades, one from Morgans, an add from hold and Credit Suisse, raised to outperform from neutral. Shares closed 4.1 per cent lower at $107.52.

Macquarie Group (ASX:MQG) also received two, Morgans raised to add from a hold but Credit Suisse cut to an underperform from neutral. Shares closed 2.6 per cent lower at $182.00. 

Those keen to find out the next major buyout proposal in the Australian market should pay close attention to the $8.7 billion Medibank Private (ASX:MPL), according to The Australian. Shares closed 1.1 per cent lower at $3.22.

AGL Energy (ASX:AGL), following Mike Cannon-Brookes’ being the largest stakeholder in the company and his campaign around the energy company’s next moves. Shares closed 1.2 per cent lower at $8.25.

Futures

The Dow Jones futures are pointing to a fall of 284 points.
The S&P 500 futures are pointing to a fall of 38 points.
The Nasdaq futures are pointing to a fall of 115 points.
The SPI futures are pointing to a fall of 55 points when the market next opens.

Best and worst performers

The best-performing sector was Energy, up 0.5 per cent. The worst-performing sector was Real Estate Investment Trusts, down 4.2 per cent.

The best-performing stock in the S&P/ASX 200 was PolyNovo (ASX:PNV), closing 3.3 per cent higher at $0.93. It was followed by shares in Westpac Banking Corporation (ASX:WBC) and Whitehaven Coal (ASX:WHC).

The worst-performing stock in the S&P/ASX 200 was Novonix (ASX:NVX), closing 12.3 per cent lower at $4.06. It was followed by shares in Imugene (ASX:IMU) and Chalice Mining (ASX:CHN).

Asian markets

Japan’s Nikkei has lost 2.5 per cent.
Hong Kong’s Hang Seng is closed due to the Buddha’s birthday.
China’s Shanghai Composite has lost 0.3 per cent.

Commodities and the dollar

Gold is trading at US$1871.38 an ounce.
Iron ore is 4.7 per cent lower at US$139.00 a ton.
Iron ore futures are pointing to a fall of 6.0 per cent.
Light crude is trading $0.48 lower at US$109.29 a barrel.
One Australian dollar is buying 70.06 US cents.