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Share market feels the rates heat

Daily Market Update

Share market feels the rates heat

The Australia share market retreated to a six-month low on Tuesday, as global markets felt the pressure from surging bond yields – despite, in Australia’s case, the Reserve Bank leaving the official cash rate on hold at 4.1 per cent, for a fifth straight month.

The benchmark S&P/ASX200 index finished down 89.8 points, or 1.3 per cent, to 6,943.4, its lowest level since March. The market gauge is now in the red for 2023, to the tune of 1.3 per cent. The broader All Ordinaries index dropped 94.5 points, or 1.3 per cent, to 7,141.

  • Ten of the 11 sectors of the ASX lost ground, with energy the worst performer, dropping 3.7 per cent following the fall in oil prices. Woodside Energy fell $1.35, or 3.7 per cent, to a nearly three-month low of $34.90, while Santos dropped 34 cents, or 4.3 per cent, to $7.53. Beach Energy was down 9 cents, or 5.5 per cent, to $1.54, and Brazilian-based producer Karoon Energy eased 10 cents, or 3.7 per cent, to $2.60.

    Among the Big Four banks, NAB closed 17 cents, or 0.6 per cent, lower at $28.79; Westpac was down 8 cents, or 0.4 per cent, to $21.05; ANZ also lost 8 cents, in its case 0.3 per cent, to $25.41; and Commonwealth Bank eased 16 cents, or 0.2 per cent, to $99.69.

    The Healthcare sub-index added 0.2 per cent, with US dollar-earners to the fore: CSL gained $2.35, or 1 per cent, to $248.71; ResMed put on 11 cents, or 0.5 per cent, to $23.04; and Fisher & Paykel Healthcare rose 7 cents, or 0.4 per cent, to $19.96; but Cochlear did not get the memo, sliding 84 cents, or 0.3 per cent, to $253.91.

    Red day for resources

    Among the heavyweight miners, BHP slid 76 cents, or 1.7 per cent, to $43.84; Fortescue Metals dropped 33 cents, or 1.6 per cent, to $20.73; and Rio Tinto retreated $2.04, or 1.8 per cent, to $112.80.

    In gold, Northern Star fell 45 cents, or 4.3 per cent, to $10.04; Newcrest gave back 79 cents, or 3.2 per cent, to $23.71; Evolution Mining retreated 16 cents, or 4.9 per cent, to $3.12; Gold Road Resources slipped 6.5 cents, or 4 per cent, to $1.58; West African Resources lost 5.5 cents, or 7.1 per cent, to 72 cents; and Bellevue Gold walked back 6 cents, or 4.3 per cent, to $1.33.

    In coal, Whitehaven Coal lost 26 cents, or 3.6 per cent, to $6.93; New Hope Corporation was down 7 cents, or 1.1 per cent, to $6.34; Coronado Global Resources surrendered 8.5 cents, or 4.6 per cent, to $1.78; and Stanmore Resources lost 9 cents, or 2.4 per cent, to $3.66.

    In lithium, producer Allkem shed 56 cents, or 4.8 per cent, to $11.15; fellow producer Pilbara Minerals weakened 12 cents, or 2.9 per cent, to $4.09; IGO, which mines nickel and lithium, was down 36 cents, or 2.8 per cent, to $12.37; and Mineral Resources, which produces iron ore and lithium, dropped $3.38, or 5 per cent, to $64.15. US-based lithium project developer Piedmont Lithium plunged 5.5 cents, or 8.4 per cent, to 60 cents.

    Copper heavyweight Sandfire Resources lost 13 cents, or 2.1 per cent, to $6.10; while rare earths producer fell 24 cents, or 3.5 per cent, to $6.54.

    US stocks balk at 16-year yield highs

    In the US, stocks reacted poorly to bond yields hitting their highest levels since 2007, as concern mounts that higher interest rates could tip the economy into a recession. The blue-chip Dow Jones Industrial Average lost 430.97 points, or 1.3 per cent, for its worst day since March, ending the session at 33,002.38. which put it into the red for 2023. The broader S&P 500 index walked back 58.94 points, or 1.4 per cent, to 4,229.45, its lowest level since June, while the tech-heavy Nasdaq Composite Index sank 248.31 points, or 1.9 per cent, to 13,059.47.

    The 10-year Treasury yield touched 4.804 per cent, its highest level in 16 years, but actually ended the day down 22.5 basis points, at 4.579 per cent. The 2-year yield eased 13 basis points, to 5.054 per cent.

    Gold shed US$1.82 to US$1,823.90 an ounce; the global benchmark Brent crude oil grade rose 21 cents, or 0.2 per cent, to US$90.92 a barrel; and US West Texas Intermediate crude also notched a 21-cent gain, to US$89.44 a barrel.

    The Australian dollar is buying 63.01 US cents this morning, down from 63.12 US cents at the ASX close on Tuesday.

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