A weak lead from Wall Street dampened local investor sentiment and weighed on the ASX 200, which declined by 0.8 per cent or 54.7 points, to 6762.8. Ten (of 11) sectors and roughly 78 per cent of stocks in the ASX 200 finished in negative territory. Energy stocks like Woodside (WDS), Beach Energy (BPT) & Santos (STO) rose and helped the Energy sector cement its ninth straight day of gains – longest streak since March 2019. Offsetting these gains however were the Financials & Mining sectors, which fell by 0.7 per cent and 1.2 per cent, respectively, after the Big 4 banks and major miners like Fortescue Metals (FMG), BHP Group (BHP) & Rio Tinto (RIO) all posted declines.
Over the week, the ASX 200 rose by 4.5 per cent – its best weekly rally in around two years. 10 sectors rose, including the Utilities sector, which surged by 6 per cent (best week since 2018) after posting its worst month on record. The Energy sector finished with a gain of 10.2 per cent. Fund manager Magellan (MFG) fell 5.2 per
cent over the week and was the worst performer on the ASX 200. This comes after its funds-under-management (FUM) update showed that its total FUM has nearly halved since the start of this year, driven partly by market volatility.
Karoon Energy (KAR) shares improved by 9.2 per cent (best performer today) after Brazilian regulators approved its Bauna Area development plan and reduced its royalty rate on its ‘incremental production from the BMS-40 license’. The reduced royalty rate decision is still ‘subject to signing an amendment of the current concession contract’ and is expected to take effect from the beginning of the month after the intervention programme was completed.
The International Finance Corporation has proposed a US$200 million project finance facility to support Allkem’s (AKE) development of the Sal de Vida project, located in Argentina. The loan will ‘help de-risk the capital structure of the project’. AKE shares rose by 3.2 per cent today.
Today, 3.4bn shares were traded, worth $6.7bn. 531 stocks rose, 773 fell & 403 finished unchanged.
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In the US tonight, jobs data (non-farm payroll) will be issued. The market expects the unemployment rate to remain steady at 3.7 per cent, with 250,000 jobs added in September (lowest increase since December 2020).
In the week ahead, a speech will be delivered on Wednesday by a Reserve Bank official which may provide insights on how much further cash rates need to rise. Overseas, the US Consumer Price Index is issued on Thursday. According to Bloomberg forecasts, CPI is expected to rise by 8.1 per cent over the year (0.2 percent over the month). The quarterly US earnings season also gets underway on Friday.
Originally published by Divik Nigam – (Author), CommSec
