A sharp sell-off in Wall Street overnight fuelled selling sentiment and pushed the Aussie market to snap four straight days of gains, with the ASX 200 tumbling by 181 points or 2.58 per cent to 6828.6 – its largest daily decline in three months. All sectors of the market and roughly 96 per cent of stocks in the ASX 200 finished in negative territory. The Big 4 banks all fell for the first time in five days and averaged a 2.7 per cent decline, pushing the broader Financials sector 2.9 per cent lower. Property stocks shed 4.2 per  cent and Miners also retreated by 2.3 per cent.

Roughly A$70 billion was wiped today in the sharemarket and this was largely driven by the release of hotter than expected inflation data in the US. This ignited concerns of potentially larger interest rate hikes by the Federal Reserve, pushing major US benchmarks to record their biggest daily declines since 2020. US Treasury yields surged with 10-year yields rising by 5 points to 3.41 per cent and 2-year yields climbing to 14-year highs of 3.74 per cent.

Lake Resources (LKE) was the worst performer today after it tumbled 16.5 per cent – its worst day since late June this year. This comes after the lithium developer advised of a dispute between itself and Lilac (lithium extraction company based in California), concerning the dates by which Lilac must achieve certain milestones, as outlined in the Pilot Project Agreement. Lilac considers it has until the 30th of November to achieve specified milestones, whereas Lake considers it to be the 30th of September.

Rio Tinto (RIO) and China Baowu Steel Group have ‘agreed to enter into a joint venture’ to develop the Western Range iron ore project in the Pilbara. RIO will invest $1.3 billion (out of a combined $2 billion investment) to develop the mine. RIO expects iron ore production to commence in 2025. The two companies have also entered into an iron ore sales agreement, covering up to 126.5 million tonnes of iron ore over 13 years. However, amidst a broader
sell off in the sharemarket, RIO shares declined by 2 per cent.

Auckland International Airport (AIA) has released its August monthly traffic update. For its Auckland Airport operations in August, AIA noted a 3.3 per cent monthly fall in the number of passengers, and a 0.3 per cent decline in aircraft movement compared to July. And for its Queenstown Airport operations, AIA saw a 4 per cent fall in the number of passengers in August, and a 3 per cent slip in aircraft movement compared to the previous month. AIA shares slipped by 1.3 per cent today.

 

Top Australian Brokers

 

In other economic news, UK inflation was weaker than expected and declined to 9.9 per cent (survey: 10.2 per cent). This was also lower than July’s inflation reading of 10.1 per cent.

Tonight in the US, producer prices are released with MBA mortgage applications.

4.6bn shares were traded, worth $7.9bn. 363 stocks rose, 1,045 fell & 384 finished unchanged.

Originally published by Divik Nigam – (Author), CommSec