Australian sharemarket lower for third straight day, iron ore miners weigh but gold stocks shine
The Australian sharemarket closed marginally lower after a choppy trading session, with banks and miners among the losers, but infant formula manufacturers rocketed.
The benchmark S&P/ASX200 index finished down just 8.2 points at 7272.5 while the All Ordinaries Index eased 3.7 points to 7571.9.
CommSec analyst Tom Piotrowski said European markets proved resilient overnight, managing to pull back a decent chunk of early losses.
But Wall Street fared worse, with sellers winning out after the Federal Reserve reiterated comments the preconditions had been met for tapering its bond purchasing program.
The futures market initially pointed to the local bourse outperforming its northern hemisphere peers.
But it was a rollercoaster ride on the ASX.
“Iron ore miners dropped lower while gold miners posted gains,” OMG chief executive Ivan Tchourilov said.
“The rest of the market was relatively idle with the exception of a few individual performances.”
Rio Tinto weakened 3.19 per cent to $99.37, BHP slipped 1.03 per cent to $37.59 and Fortescue slumped 5.34 per cent to $14.
Australia’s biggest gold producer Newcrest added 0.92 per cent to $24.14, Evolution Mining lifted 1.36 per cent to $3.72, Northern Star gained 1.85 per cent to $9.37 and Ramelius Resources put on 1.63 per cent to $1.55.
Gold and copper miner Sandfire Resources announced its intention to sell its stake in UK-based silver explorer Adriatic Metals.
Sandfire shares dipped 0.74 per cent to $5.37.
ANZ slid 0.39 per cent to $27.78, Commonwealth Bank dropped 1.59 per cent to $103.22 and Westpac shed 1.29 per cent to $25.30 but National Australia Bank added 0.28 per cent to $28.54.
Bank of Queensland reported strong full-year earnings, with statutory net profit up 221 per cent to $369m, but its shares slumped 4.32 per cent to $9.30.
“Their profit has jumped but a cautious outlook for FY22 spurred investors into selling out,” Mr Tchourilov said.
“The expected net interest margin decline of up to seven basis points and a modest increase to expenses doesn’t paint a rosy picture for the year ahead.
“Meanwhile, it does fall broadly in line with the cautious optimism we expect to be a recurring theme during quarterly updates this year.
“It is also worth noting that BoQ was the third most purchased stock through Openmarkets today.”
S&P Global Ratings gave a favourable report on the bank, saying its integration of ME Bank appeared on track and lending growth should remain strong, backed by BoQ’s multibrand strategy that targeted distinct customer sets across Australia’s eastern seaboard.
“BoQ announced growth in its housing portfolio 1.7 times that of system, reflecting the bank’s recent loan origination improvements, in our view,” the ratings agency said.
“The bank also announced growth across all its retail banking divisions in fiscal 2021.”
Infant formula maker Bubs Australia provided a September quarter update showing total gross revenue had nearly doubled compared to the same period last year amid a strong rebound in its China-facing business, with daigou sales rocketing.
Bubs shares soared almost 39 per cent to 50 cents.
Another infant milk manufacturer, a2 Milk Company, jumped 13.45 per cent to $6.58.
“a2 Milk shareholders are riding the highs of smaller infant formula competitor, Bubs,” Mr Tchourilov said.
“Their most significant revenue generator was from international channels, which are starting to open back up, while the domestic market remains slow.
“The reopening of international channels could signal good news for A2 Milk, whose bread and butter has been selling infant formula into the Chinese daigou.”
Jewellery retailer Michael Hill put on 4.44 per cent to 94 cents after releasing a September quarter trading update late on Tuesday showing digital sales had surged.
Other consumer stocks that fared well included online only retailer Kogan, up 5.85 per cent at $10.50, Shaver Shop, up 3.55 per cent at $1.02, and meal kit delivery business Marley Spoon, up 3.4 per cent at $1.51.
The Aussie dollar was buying 73.41 US cents, 53.93 British pence and 63.52 Euro cents in afternoon trade
Originally published as Australian sharemarket lower for third straight day, iron ore miners weigh but gold stocks shine
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