Spooked investors booked their profits on fears of the impact from an aggressive interest rate hiking cycle after a weak lead from Wall St. Technology titans left the session battered down for its second straight day along with the local bourse’s decline again. The local market is on track to snap its three week winning streak.
Defensive players rose with consumer staples, utilities, and property rallying up to 0.6 per cent to 0.2 per cent while information tech posted a 3.4 per cent tumble from its 2.8 per cent fall from the prior session. Consumer discretionary lost 1.6 per cent, followed by energy down 1.3 per cent and materials, closing 0.7 per cent lower. The other sectors had their feet in the red bath also.
The individual winners included Fortescue Metals (ASX:FMG) rose 0.4 per cent to $21.75 after completing a $2 billion (US$1.5 billion) in senior notes offering more US$800 million for green projects and the balance to general corporate purposes.
Theme park operator Ardent Leisure (ASX:ALG) is set to exit the US entertainment sector after inking a deal to sell its Main Event business to Dave & Busters for $1.1 billion as per the AFR. Shares jumped 6.2 per cent to $1.38. The Aussie operator is set to receive around $640 million in cash from the deal with the proceeds to be used to repay debt, fund growth in its theme parks business, and return around $0.90 per share, or $430 million, to Ardent shareholders. Following the sale, Ardent’s main business will be only theme parks.
Telstra’s (ASX:TLS) shares closed at session highs of 0.8 per cent to $3.96 after outgoing chief executive Andy Penn says the Digicel deal is set to go ahead after a controversial super tax in Papua New Guinea overshadowing the takeover, according to The Australian.
Magellan Financial Group’s (ASX:MFG) outflow eased to $1.1 billion from March 11 to 31, split between $500 million from retail and $600 million from institutional clients from the $5 billion during the period of February 25 to March 11. Shares surged on optimism as the best performer of the session, closed 11.4 per cent higher to $17.23.
High growth tech titans such as Block (ASX:SQ2), Wisetech Global (ASX:WTC), Xero (ASX:XRO), and Novonix (ASX:NVX) suffered heavy losses of up to 7 per cent with BHP (ASX:BHP) falling 0.7 per cent bucking the trend of Fortescue Metals while Macquarie Group (ASX:MQG) led the fall in the banking circle, closing 1.5 per cent lower.
Meanwhile, traders are mulling over China’s recent move after paying for Russian coal and oil paid in yuan. The first cargoes are set to arrive this month, according to the Chinese consultancy Fenwei Energy Information Service Co. The deal is the first commodity order paid for in yuan since the US and Europe slapped sanctions on Russia and cut several of its banks off from the international financial system.
At the closing bell, the S&P/ASX 200 was 0.6 per cent or 47 points lower at 7,443.
The Dow Jones futures are pointing to a fall of 78 points.
The S&P 500 futures are pointing to a fall of 8 points.
The Nasdaq futures are pointing to a fall of 10 points.
The SPI futures are pointing to a fall of 42 points when the market next opens.
Local economic news
The seasonally adjusted balance on goods and services surplus decreased $4,329 million to $7,457 million in February.
Goods and services credits (exports) rose $120 million to $48,769 million, driven by a rise in exports of non-monetary gold and cereal grains and cereal preparations.
Goods and services debits (imports) rose $4,449 million to $41,312 million, driven by increases in imports of processed industrial supplies, according to the Australian Bureau of Statistics.
Payroll jobs fell 0.6 per cent in the month to 12 March while the seasonally adjusted estimate for total dwellings approved rose 43.5 per cent. according to the Australian Bureau of Statistics.
Ord Minnett has retained its hold rating on ASX (ASX:ASX) and boosted its target price to $85.00 from $84.56. The move comes after the broker noted that derivative volumes fell in March while cash and capital raising transactions rose compared to a year ago, helped by market volatility and BHP making the ASX the primary home. Shares closed 0.8 per cent lower to $82.
Bell Potter retained its buy rating for Mineral Resources (ASX:MIN) and popped its price target by 21 per cent to $74.35. The move comes to reflect the miner’s lithium production plans. Shares are trading 0.6 per cent lower to $60.01.
UBS rates Insurance Australia Group (ASX:IAG) as a sell, trimming its price target to $4.10 from $4.20. The broker reviewed its forecast for the insurer and believes the consensus expectations are far above its ability to increase margins into financial year 2023. This comes on the back of rising prices, inflation. The recent floods are set to compound these claims cost pressures. The broker prefers QBE Insurance (ASX:QBE) and Suncorp Group (ASX:SUN). Shares in IAG closed 2.5 per cent lower at $4.27.
Macquarie rates Polynovo (ASX:PNV) as an outperform with its price target of $1.60. The medical device company posted revenue growth of 59 per cent to $12.3 million in March. The broker believes the company will hit its fourth quarter sales in their flagship product Novosorb of $12.2 million and remains positive on the company as a medium to long term candidate. Shares are trading 0.4 per cent lower at $1.12.
Citi rates Siteminder (ASX:SDR) as a neutral with a price target of $5. The broker observes that the migration of its existing customers to its new platform is set to chip away at its short-term gross margins but anticipates margin improvement in this current financial year to financial year 2024. Citi expects its margin to grow 4 per cent from 81 per cent to 85 per cent in that period. The broker believes that the new platform will open up new selling opportunities due to its improved integration as it is designed to combine, digitise and simplify the ecosystem of booking channels, property management systems, and hotel related activities. Shares closed 3.6 per cent lower $4.81.
Best and worst performers
The best-performing sector was Consumer Staples, up 0.6 per cent. The worst-performing sector was Information Technology, down 3.4 per cent.
The best-performing stock in the S&P/ASX 200 was Magellan Financial Group (ASX:MFG), closing 11.4 per cent higher at $17.23. It was followed by shares in GrainCorp (ASX:GNC) and Paladin Energy (ASX:PDN).
The worst-performing stock in the S&P/ASX 200 was Life360 (ASX:360), closing 6.7 per cent lower at $5.12. It was followed by shares in Liontown Resources (ASX:LTR) and WiseTech Global (ASX:WTC).
Japan’s Nikkei has lost 1.7 per cent.
Hong Kong’s Hang Seng has lost 0.7 per cent.
China’s Shanghai Composite has lost 0.8 per cent.
Commodities and the dollar
Gold is trading at US$1924.76 an ounce.
Iron ore is 0.4 per cent lower at US$160.20 a ton.
Iron ore futures are pointing to a fall of 2.5 per cent.
Light crude is trading $1.49 higher at US$97.72 a barrel.
One Australian dollar is buying 74.86 US cents.