Tech blues, interest rate concerns weigh: ASX closes 0.8% lower

The Australian sharemarket closed at session lows, nearly wiping off all this week’s gains. Investors continued to sell out of treasuries, and equities on expectations that the Reserve Bank of Australia is set to raise interest rates by 40 basis points and take the cash rate to 0.75 per cent next Tuesday.

At the closing bell, the S&P/ASX 200 was 0.8 per cent or 58 points lower at 7,176.

The selloff was driven by this week’s better-than-expected Australian GDP figures. Some economists also expect the RBA policy statement to slant towards a hawkish tone as policymakers prioritise combating multi-year high inflation.

Information technology led the declines by 2.7 per cent, followed by healthcare’s 2 per cent fall. Materials shed the least, losing 0.5 per cent. The only two winners were energy and utilities, up by 3 per cent, and 1.1 per cent respectively.

Woodside Energy (ASX:WDS) was the best performer on the ASX 200, jumping 5.2 per cent to $31.75 after the company completed its merger with BHP’s petroleum division. News that a $1.12 billion block trade of unwanted stock inherited by BHP shareholders was executed by JP Morgan last night didn’t seem to dampen sentiment.

Tabcorp Holdings (ASX:TAH) and IGO (ASX:IGO) were the other winners of the session, while Megaport (ASX:MP1) tumbled 6 per cent at $6.53 as the worst performer, followed by PolyNovo (ASX:PNV), and Telix Pharmaceuticals (ASX:TLX).

Infant formula producers stayed hot following the news that the Biden administration announced its fourth “Operation Fly Formula” mission to transport the first two deliveries of Bubs Australia (ASX:BUB) infant formula products to America. Bubs shares soared 6 per cent to 62 cents while Australian Dairy Nutritionals (ASX:AHF) jumped 3.8 per cent to 8.2 cents.

ANZ Bank (ASX:ANZ), Rio Tinto (ASX:RIO), Northern Star (ASX:NST) each led their respective sector lower, while coal miners Whitehaven Coal (ASX:WHC) and New Hope Corporation (ASX:NHC) both rose 1.6 per cent.

Local economic news

Following yesterday’s better-then-expected GDP figures, there was more positive economic news today as Australia’s April trade surplus widening to $10.5 billion from an upwardly revised $9.74 billion in the previous month, beating market expectations of a surplus of $9.3 billion. Exports grew by 1 per cent over the month to a new record high of $50.4 billion, while imports fell 0.7 per cent to $39.9 billion in the same period.

Company news

ASX (ASX:ASX) has named its first female managing director and chief executive officer Helen Lofthouse to start in August. Shares closed 1 per cent lower to $80.65.

Gracie MacKinlay has been promoted to chief executive officer of Kogan’s (ASX:KGN) eCommerce platform, Mighty Ape. Shares closed 0.6 per cent higher to $3.56.

Pilbara Minerals (ASX:PLS) has appointed Dale Henderson as managing director and chief executive officer. Shares closed 0.9 per cent lower to $2.28.

Family Zone (ASX:FZO) announced the appointment of Dr Jane Watts as a non-executive director. Shares closed at 36.5 cents.

Magnetite Mines (ASX:MGT) announced the appointment of Simon Wandke as non-executive director, effective immediately. Shares closed 4 per cent higher to 2.6 cents.

Chris Marshall has notified the board that he intends to retire as a director of My Food Bag (ASX:MFB) at this year’s annual shareholders’ meeting in August and will not seek re-election. Shares last traded at 8.1 cents.

Further to the request in May for ResApp Health (ASX:RAP) to be placed in trading halt, the company has requested to be placed in voluntary suspension, pending an update of the proposed acquisition by Pfizer Australia Holdings by way of a scheme of arrangement.

Marquee Resources has signed a deal with Mineral Resources (ASX:MIN) to develop lithium deposits across the West Spargoville Project in WA. The legally binding term sheet is conditional on Mineral Resources completing its due diligence within four weeks. Mineral Resources also has the rights to buy an initial 25 per cent interest in the project by funding all exploration and development activities and completing a feasibility study on the project, including a JORC compliant resource within two years. Shares closed 1.9 per cent lower to $57.58.

Wesfarmers’ (ASX:WES) boss Rob Scott said the group is set to focus on new growth areas, including the Mt Holland lithium project, its health division, and leveraging its brands and stores with digital unit OneDigital. Shares closed 0.6 per cent lower to $47.28.
 
Futures

The Dow Jones futures are pointing to a rise of 13 points.
The S&P 500 futures are pointing to a rise of 4 points.
The Nasdaq futures are pointing to a rise of 6 points.
The SPI futures are pointing to a fall of 64 points when the market next opens.

Asian markets

Hong Kong’s Hang Seng has lost 1.37 per cent.
Japan’s Nikkei has lost 0.15 per cent.
China’s Shanghai Composite has gained 0.25 per cent.

Commodities and the dollar

Gold is trading at US$1848.97 an ounce.
Iron ore is flat at US$136.55 a ton.
Iron ore futures are pointing to a rise of 3.0 per cent.
Light crude is trading $2.19 lower at US$113.07 a barrel.
One Australian dollar is buying 71.60 US cents.