Risks of bad debts weigh on banks: ASX falls 1.3% at noon

The major banks weigh on the Australian sharemarket after the Reserve Bank of Australia announced its outsized interest rate hike this week. Investors are concerned about the impact of rising interest rates and the risk of bad debts.

At noon, the S&P/ASX 200 is 1.3 per cent or 89 points lower at 7,032.

Nine sectors are in the red led by financials, property, and materials while energy and healthcare are higher.

Westpac Banking Corporation (ASX:WBC), Commonwealth Bank of Australia (ASX:CBA) are both down 4 per cent, National Australia Bank (ASX:NAB) is down 3.3 per cent to $27.98 while Macquarie Group (ASX:MQG) is trading 0.1 per cent lower to $178.99. Woodside Energy (ASX:WDS) rose 1.7 per cent at $35.32, CSL (ASX:CSL) is up 2.1 per cent to $273.01 while Ramsay Healthcare (ASX:RHC) is trading 1.1 per cent higher to $77.80.

The best-performing stock in the S&P/ASX 200 is Magellan Financial Group (ASX:MFG), trading 3.1 per cent higher at $12.94 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 is Clinuvel Pharmaceuticals (ASX:CUV), trading 8.6 per cent lower at $14.10.

Elsewhere, BHP Group (ASX:BHP) is down 1.1 per cent at $46.86, Northern Star (ASX:NST) has fallen 2.2 per cent at $8.54 while Qantas (ASX:QAN) is trading 3.4 per cent lower to $5.24.

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

There’s 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) are trading 10.9 per cent higher at 51 cents while shares in Lithium Australia (ASX:LIT) are up 1.2 per cent at 8.2 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 are trading 14.8 per cent higher to $1.94.

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 are trading 11.3 per cent lower at $1.36.

Fenix Resources (ASX:FEX) has 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 are trading 3.2 per cent higher to 32 cents.

Aurizon Holdings (ASX:AZJ) has 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 are trading 0.4 per cent lower to $4.18.

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 last traded at 10.5 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 last traded at 19 cents.

Commodities and the dollar

Gold is trading at US$1,852.69 an ounce.
Iron ore is 0.2 per cent lower at US$146.90 a ton.
Iron ore futures are pointing to a rise of 0.64 per cent.
One Australian dollar is buying 71.69 US cents.

Sources: Bloomberg, IRESS, Australian Bureau of Statistics