Stockmarkets in Asia, led by Australia will be sold off heavily this morning after a widespread slide in Europe and the US on Friday night off the back of weak factory activity reports which helped produce a sharp fall in official bond yields.
Friday’s rise of 28 points on the ASX 200 Index produced a rose 20 points, or 0.3% weekly rise, to close at 6,195.2, while the broader All Ordinaries ended up 15.8% or 0.3% to 6280.9.
Judging by the falls of nearly 2% on Wall Street and the sharp fall in US Treasury bond yields (Australian bonds also slid with the 10-year yield ending at 1.83% on Friday according to Bloomberg data), local and Asian markets will take a few hits today and tonight.
The US dollar rose, the Aussie ended at 70.83, around where it was a week earlier, while gold rose and oil eased on the day.
A rise in iron ore prices on Friday and uncertainty about the impact of Cyclone Veronica on the big iron ore ports of Port Hedland and Dampier will keep investors interested in the big miners today, but the weak economic data will go a way to offsetting that.
BHP Group shares rose 3.1% last week to $37.61, Rio Tinto rose 2.7% to $94.17 and Newcrest Mining shares rose 2,7% to $25.39. Fortescue Metals shares rose 1.3% to $6.59. Shares in South32 edged up 1.6% to $3.87.
Shares in Estia Health stood out with the shares running up 17% to $2.85.
On the other side of the ledger, a number of companies saw the shares slide. Eclipx Group lost more than half its market value – 60.5% in fact to 74.5 cents after it warned shareholders of weaker than expected results, suspended dividends and called off the wedding with rival McMillan Shakespeare.
It was very disappointing for investors, hence the very sharp sell-off.
New Hope Corp’s half-year results were the best ever, but left investors underwhelmed, especially with China continuing to block or slow down imports of thermal coal from Australia – the type New Hope produces from mines in NSW and southern Queensland.
As a result New Hope shares fell 26% to $3.25.
The drought got Nufarm, as did investor concerns about a US court decision casting more doubt on its key herbicide chemical, glyphosate. Nufarm shares fell nearly 14% to end at $4.63.
The big four banks were mixed – CBA shares fell 1.2% to $71.43, NAB shares lost 0.5% to $25.09, Westpac shares edged up 0.1% at $26.51 and ANZ shares stood out with a gain of 0.6% to $26.52.
