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Briefing

Market Wrap

ASX finishes lower as global trade tensions rise

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The news: The Australian sharemarket finished lower amid renewed trade tensions between the US and China and following Donald Trump’s announcement on Sunday that he plans to raise tariffs on steel and aluminium imports from 25% to 50%.

The benchmark ASX 200 fell 0.24% to close at 8414.1, with eight of 11 sectors finishing in the green.

Biggest movers:

  • Brickworks (+27.6%) and Soul Patts (+16.4%) – The two stocks were the best performers on the ASX 200 after announcing they would merge in a long awaited $14 billion deal.
  • Energy (-1.09%) – The worst performing sector was led by Woodside (-1.1%), Santos (-1.5%), and Yancoal (-1.2%). The sector wide decline followed an OPEC+ agreement over the weekend to ramp-up oil production in July.
  • Clarity Pharmaceuticals (-12.3%) – The worst performer on the ASX 200 today despite no company-specific news.
  • Big banks – Three of Australia's big four banks saw their share prices fall. NAB (-0.7%), ANZ (-0.2%), and Westpac (-1.2%) finished lower although Commonwealth Bank (+0.3) ended higher.

Commodities commotion:

  • Lithium producers – Shares are suffering as lithium prices remain low amid oversupply of the battery material. Mineral Resources (-11.8%) took the biggest losses, followed by Liontown Resource (-8.3%), Pilbara Minerals (-8.1%) and IGO (-4.4%).
  • BlueScope Steel (+4.4%) – The steel producer was among the best performers on the ASX 200 following Trump’s tariff announcement. BlueScope has a significant manufacturing presence in the US.
  • Aluminium producers – Smelter operators took a hit to their share price after Trump’s aluminium tariff announcement, with Alcoa Corporation losing 4.8% and Rio Tinto falling 1.7%. Shares in miner South32 (-3.6%) also fell.
  • Gold miners – Demand for the haven asset was buoyed by a renewal of trade tensions between the US and China as well as strikes in Russia and Ukraine ahead of peace talks. Evolution Mining (+3.1%), Regis Resources (+2.8%) and Ramelius Resources (+2.4%) were the best performing.
  • Iron ore miners – Iron ore prices hit a one-month low, with Australia's largest miners seeing their share price slide. In addition to Rio Tinto, BHP (-1.2%) and Fortescue (-2.5%) also fell.

Other news:

  • Fisher and Paykel (+2.7%) – Stock was upgraded by Morgan Stanley and Citi analysts.
  • James Hardie (+1.4%) – New credit facilities have been secured by the building products group to support its $14 billion acquisition of NYSE-listed The AZEK Company.
  • Charter Hall (+1.2%) – Morgan Stanley analysts said the company is its 'top pick' in the Australian property market.
  • Perpetual (+0.5%) – The fund manager expects full-year gross debt to be lower than previously forecast after refinancing its syndicated debt facilities.
  • Opthea – The troubled biotech company has lost half of its board. Dr Julia Haller, Dr Susan Orr, Quinton Oswald and Anshul Thakral have resigned, effective today. Its shares are in a trading halt.
  • Mayne Pharma (-0.4%) – The drug company is counter-suing TherapeuticsMD on breach of contract and fraud allegations and has also filed a complaint to have the US-based company’s allegations dismissed in their entirety.

More mining news:

  • Perenti (+3.5%) – A joint venture subsidiary of the mining services firm has signed a $1.1 billion contract to support gold mines in Burkina Faso.
  • Boss Energy (-2.8%) – Former EY partner Joanne Palmer and Paladin Energy's former legal manager Caroline Keats have joined the board of the uranium miner.
  • Paladin Energy (-4%) – The uranium miner is “encouraged" by drilling results at its Patterson Lake South project in Saskatchewan, Canada.
  • Coronado Global Resources (-4.6%) – The coal miner announced it had received a loan waiver and that one of its undrawn lenders has walked away.

What’s ahead:

  • The US Institute of Supply Management will release monthly purchasing manager’s index data and manufacturing prices overnight.
  • US Federal Reserve chair Jerome Powell will deliver opening remarks at the Federal Reserve Board of Governors International Finance Division's 75th Anniversary Conference tomorrow at 3am.
  • The Australian Bureau of Statistics will release data on balance of payments and international investment position, business indicators, government finance statistics, and mineral and petroleum exploration tomorrow at 11:30am.
  • The Swiss Federal Statistical Office will release monthly consumer price index data tomorrow at 4:30pm.

By Brandon How