Following a sell-off in US equities on Friday – driven by comments made by US Federal Reserve Chair Jerome Powell at the Jackson Hole Economic Symposium – the Aussie market posted
its biggest decline in around two months, with the ASX 200 losing 138.6 points or 1.95 per cent, to 6965.5. All sectors finished lower, with Tech shares (down 4.4 per cent) falling the most. Energy stocks (down 1.6 per cent) snapped four straight days of gains, and the Material sector shed 2.4 per cent – its worst decline this month. The Big 4 banks all fell by at least 1.9 per cent, with the broader Financials sector retreating by 2.2 per cent.
US Federal Reserve Chair Jerome Powell delivered a much anticipated speech at the Jackson Hole symposium. Chair Powell reminded the audience of the Fed’s resolve to bring inflation back down to 2 per cent. He mentioned that “reducing inflation” will “bring some pain to households and businesses”, and stated that these pains are the “unfortunate costs of reducing inflation”. The US sharemarket responded by falling 3.4 per cent – its largest single day decline since mid-June.
The a2 Milk Company (A2M) had its best day since May after it released its annual results. Its revenues rose by 20 per cent to NZ$1.4 billion, and its profits increased by 42.3 per cent to
NZ$114.7 million. It also posted improvements across its margins, and announced a NZ$150 million share buy-back. It expects its revenues to grow by ‘high single digits’ over FY23. A2M shares closed 10 per cent higher.
Fortescue Metals (FMG), the second-largest miner on the Aussie market, fell 4.9 per cent after releasing its FY22 results. Its shipments ‘exceeded the top end of its guidance’, but its profits fell by 40 per cent to US$6.2 billion. Its revenues and underlying EBITDA also declined. This was driven partly by a ‘reduction in the iron ore benchmark price’ and a 26 per cent reduction in its ‘average price realisation’. FMG also cut its dividend by 43 per cent to $1.21 per-share, and said that its C1 costs increased by 14 per cent.
In its annual results, Mineral Resources (MIN) posted an 8 per cent decline in its revenues and a 64 per cent fall in its underlying NPAT. It also slashed its final dividend by 43 per cent to $1 per share, but said that its FY22 costs were ‘maintained within guidance’. MIN shares shed 1.7 per cent – first decline in seven days.
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Later this week, BHP (BHP), the largest company on the Aussie market will trade ex-dividend. The last time BHP shares traded ex-dividend (24 February), they fell by 6.9 per cent.
3.8bn shares were traded, worth $7.3bn. 327 stocks rose, 1,145 fell & 323 finished unchanged.
In the US tonight, the Dallas Federal Reserve manufacturing activity index is scheduled.
Originally published by Divik Nigam – (Author), CommSec