by Paul Sanger
Australian shares touched a near seven-week low, a day after the country’s central bank raised rates, as a slide in commodity stocks and Wall Street weighed on the benchmark index.
At the closing bell, the S&P/ASX 200 was 1.42 per cent or 97.20 points lower at 6729.30.
Futures
The Dow Jones futures are pointing to a fall of 95 points.
The S&P 500 futures are pointing to a fall of 11.50 points.
The Nasdaq futures are pointing to a fall of 25.50 points.
The SPI futures are pointing to a fall of 102 points when the market next opens.
Best and worst performers
The best-performing sector was Information Technology, up 0.33 per cent. The worst-performing sector was Energy, down 2.88 per cent.
The best-performing stock in the S&P/ASX 200 was ResMed (ASX:RMD), closing 4.23 per cent higher at $33.51. It was followed by shares in Virgin Money UK (ASX:VUK) and Fisher & Paykel Healthcare (ASX:FPH).
The worst-performing stock in the S&P/ASX 200 was Chalice Mining (ASX:CHN), closing 13.04 per cent lower at $3.80. It was followed by shares in Insignia Financial (ASX:IFL) and Viva Energy Group (ASX:VEA).
Asian markets
Markets in Asia-Pacific are traded lower as investors anticipate the Federal Reserve will give its summary on current economic conditions, also known as the Beige Book.
China’s exports grew 7.1 per cent in August from a year earlier, missing estimates of 12.8 per cent forecasted in a Reuters poll, after growing 18 per cent in July. The offshore Chinese yuan weakened further to 6.99.
The Nikkei 225 in Japan is trading 0.89 per cent lower and the Topix is 0.71 per cent lower. In mainland China, the Shanghai Composite has pared earlier losses to trade slightly higher and the Shenzhen Component is up 0.36 per cent. The Hang Seng index is 1.75 per cent lower and the Hang Seng Tech Index is down 2.45 per cent.
In South Korea, the Kospi is trading 1.55 per cent lower.
US bond yields surged overnight, with the 10-year US Treasury yield jumping to its highest level since June. The rate on the 30-year Treasury closed at its highest level since 2014. Bond yields move inversely to prices.
Macro Summary: Australia/New Zealand
Economy
Consumer spending and exports underpin another solid rise in Australian GDP: Australian Q2 GDP was driven largely by household consumption, which contributed 1.1 per cent to growth as spending on services lifted due to an easing of travel restrictions. The trade sector was a highlight with net exports adding 1.0 per cent to GDP, reflecting stronger mining shipments and the return of international students. Nominal GDP was growth underpinned by strong terms of trade as surging commodity prices lifted mining profits. However, cost pressures continue to build with employee compensation growth reaching the highest in 12-years.
Australian airfares rose more than 56 per cent in the four months through August: The ACCC’s airline monitoring report for Q3 noted discount economy airfares rose 56 per cent from an 11-year low in April 2022 to the highest since late 2020 in August. Reduced capacity, stronger demand and higher jet fuel costs contributed to the jump in airfares, which was also accompanied by the worst on-time performance on record as airlines contended with staff shortages and other operational difficulties.
Data
Australia
Q2 GDP +0.9 per cent q/q vs consensus +0.9 per cent and +0.8 per cent in Q1
GDP +3.6 per cent y/y vs consensus +3.4 per cent and +3.3 per cent in Q1
August AIG services index 53.3 vs 51.7 in July
China trade weaker than expected
Customs exports rose 7.1 per cent y/y in August, below consensus 12.8 per cent and follows 18.0 per cent in the previous month. Imports edged up 0.3 per cent vs consensus 1.1 per cent and prior month’s 2.3 per cent. This left trade surplus at $79.39B vs consensus $92.7B and record $101.26B in prior month. Recall that stronger than expected exports last month was a source of encouragement, possibly supported by pent-up demand as local lockdowns eased. Reuters preview showed outlook for external demand subdued as surging inflation cripples overseas demand and China’s zero-COVID policy disrupts production and business activity. Stunted imports are also a function of sluggish consumption and a property crisis. Forecasters noted PMIs broadly showing exports weaker, South Korea’s exports to China extended declines. Citi cited partial month data indicating sharp deceleration in cargo throughput in China’s eight major ports.
Company news
Antisense Therapeutics Limited (ASX:ANP) intends to conduct a double-blind, placebo controlled six month dosing trial of ATL1102 followed by a six month open label phase in non-ambulant boys with Duchenne’s Muscular Dystrophy (DMD). Dr Charmaine Gittleson, the Chair of ANP said: “The Board, management and the Company’s clinical advisors remain focused on bringing ATL1102 to the non-ambulant DMD population. We believe that the study provides a valuable and significant de-risking step toward achieving this outcome. We believe this represents significant value to the DMD community and our shareholders.” Shares closed 4 per cent lower at 9.6 cents.
Euro Manganese Inc (ASX:EMN) has confirmed that two shipments, comprising 12 containers and including all modules of the Demonstration Plant, have now arrived at the Chvaletice Project site in the Czech Republic. The Demonstration Plant is expected to operate for up to three years and will be available for testing of potential additional feedstock for the commercial Chvaletice plant, as well as testing production of potential alternative manganese end products requested by the market. Shares closed 5 per cent higher at 31.5 cents.
Lake Resources NL (ASX:LKE) has appointed Mr David Dickson to the role of CEO and Managing Director. Mr Dickson is an industry leader with over 30 years’ experience in process technology, engineering, construction, and EPC cost management, across the energy sector and has a proven track record in successfully delivering multibillion dollar resource projects. Lake Executive Chairman Mr Stuart Crow said, “This is a major achievement to have secured a CEO like David as Lake goes from project development to construction to become a major lithium producer.“ Shares closed 0.41 per cent higher at $1.21.
Commodities and the dollar
Gold is trading at US$1697.18 an ounce.
Iron ore is 0.7 per cent lower at US$97.30 a tonne.
Iron ore futures are pointing to a fall of 1.0 per cent.
Light crude is trading $1.42 lower at US$85.46 a barrel.
One Australian dollar is buying 67.17 US cents.
