Travel stocks & a2 Milk tumble, Banks fall: ASX closes 0.6% lower

The Australian sharemarket faded into negative territory this afternoon despite an optimistic start. The local bourse was weighed down by travel stocks, major banks and the A2 Milk Company. At the closing bell, the S&P/ASX 200 was 0.6 per cent or 42 points lower at 7,207. Meanwhile, Wall Street rallied overnight. 

Most sectors went backwards in the afternoon session. In fact, all sectors closed in the red except energy and technology. Consumer discretionary fell 1.3 per cent as the worst performer, followed by financials, down 1 per cent, then industrials and consumer staples, both down 0.8 per cent. Energy took over tech’s lead, closing 0.6 per cent higher, while technology closed 0.4 per cent higher. 

The best-performing stock was Whitehaven Coal (ASX:WHC), closing 4.1 per cent higher. The worst performing stock was the A2 Milk Company (ASX:A2M), closing 7.7 per cent lower following a class action filed against them by Slater and Gordon Lawyers in the Supreme Court of Victoria.

Major banks fell further, led by Commonwealth (ASX:CBA), which closed 2.1 per cent lower following APRA changes on mortgages in relation to raised loan serviceability rates. Travel stocks fell, led by Flight Centre (ASX:FLT) and Webjet (ASX:WEB), which closed 6.8 and 6.1 per cent lower.

NSW prepares for the reopening of venues on Monday after the state jumped the 70 per cent vaccination mark. 

Tech stocks were mixed as Afterpay (ASX:APT) held its lead, closing 3 per cent higher, while software giant WiseTech Global (ASX:WTC) dropped 3.4 per cent. Afterpay’s rival Zip Co (ASX:Z1P) closed flat.

In headlines today, Magellan Financial (ASX:MFG) closed 4 per cent lower, following net outflows of $1.5 billion in September. Hotel and gambling giant Endeavour (ASX:EDV) closed 1.8 per cent lower, following news Bruce Mathieson Jr will step down as CEO for the hotel division in December.

Local economic news

No economic news scheduled today.

Company news

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Law firm Slater and Gordon has filed a class action against the a2 Milk Company (ASX:A2M) on behalf of investors who bought shares over a nine-month period during which the infant formula maker posted four earnings downgrades.

Investment giant Magellan (ASX:MFG) has posted net outflows of $1.5 billion for the September quater, around 1.3 per cent of average funds under management (FUM).

Australian property giant Stockland (ASX:SGP) has appointed Alison Harrop as chief financial officer, after she stepped down as CFO for Dexus Property Group last month.

The son of investment billionaire Bruce Mathieson has announced he will step down from his role as CEO for Endeavour’s (ASX:EDV)hotel division.

Futures

The Dow Jones futures are pointing to a fall of 128 points.
The S&P 500 futures are pointing to a fall of 21 points.
The Nasdaq futures are pointing to a fall of 84 points.
The SPI futures are pointing to a fall of 53 points when the market next opens.

Best and worst performers

The best-performing sector was Energy, up 0.6 per cent. The worst-performing sector was Consumer Discretionary, down 1.3 per cent.

The best-performing stock in the S&P/ASX 200 was Whitehaven Coal (ASX:WHC), closing 4.1 per cent higher at $3.59. It was followed by shares in Virgin Money UK (ASX:VUK) and Janus Henderson Group (ASX:JHG).

The worst-performing stock in the S&P/ASX 200 was The A2 Milk Company (ASX:A2M), closing 7.7 per cent lower at $6.02. It was followed by shares in Flight Centre Travel Group (ASX:FLT) and Webjet (ASX:WEB).

Asian markets

Japan’s Nikkei has lost 1.3 per cent.
Hong Kong’s Hang Seng has lost 0.5 per cent.
China’s Shanghai Composite is closed for China National Day.

Commodities and the dollar

Gold is trading at US$1754.22 an ounce.
Iron ore is 0.5 per cent lower at US$116.58 a ton.
Iron ore futures are pointing to a rise of 5.4 per cent.
Light crude is trading $0.21 higher at US$79.14 a barrel.
One Australian dollar is buying 72.65 US cents.