Mid-market trading in Australia sees continued declines from initial market openings
Australian Market Extends Losses Amid Sectoral Weakness and Financial Selloff
The Australian market extended its early losses in mid-market trading on Thursday, primarily due to a broad selloff led by major banks and financial shares. The S&P/ASX 200 index fell about 1.1% by midday AEST with financials being the worst performers.
Westpac, ANZ, NAB, and Commonwealth Bank saw sharp share price declines, dragging down the broader sector. Other large stocks, including Goodman Group, CSL, and Wesfarmers, also declined, contributing to the downside pressure.
The market weakness came amid broad negative sentiment across all 11 sectoral indices and concerns around earnings and deal uncertainties affecting key companies like Insignia Financial.
In the mining sector, Fortescue added more than 3 percent after announcing a record volume of iron ore shipped in the year to June and forecasting stronger growth in the next 12 months. However, among gold miners, Evolution Mining declined more than 3 percent.
The tech space saw losses as well, with Afterpay owner Block and Xero losing almost 1 percent each. WiseTech Global remained flat.
In the services sector, the PMI score improved to 53.8 in July, indicating expansion. The services PMI score for June was 51.8. The composite PMI moved to 53.6 in July, suggesting a steady growth trajectory.
However, the manufacturing sector continued to expand in July, with a manufacturing PMI score of 51.6. The benchmark S&P/ASX 200 was losing 17.90 points or 0.21 percent and was staying just above the 8,700 level.
Bapcor, which owns the Autobarn, Autopro, and Burson brands, announced underwhelming trading updates with sales weaker than expected in May and June. As a result, shares in Bapcor tumbled almost 29 percent, and the company announced $50 million in post-tax writedowns. Three directors are also exiting from Bapcor.
Rio Tinto and Mineral Resources were flat, while Newmont was down more than 1 percent. In contrast, Zip and Appen gained more than 2 percent each, and Gold Road Resources edged down 0.5 percent. Resolute Mining and Northern Star Resources lost almost 3 percent each.
The Aussie dollar was trading at $0.661 on Thursday. The Australian market's ongoing volatility can be attributed to tariff uncertainties, US debt concerns, and expectations of slower growth and profits. However, on this particular day, the significant losses were dominated by financial sector weakness led by the big lenders.
[1] Source: Reuters, Bloomberg, and ASX announcements. [4] Additional context: The market had recently been volatile due to tariff uncertainties, US debt concerns, and expectations of slower growth and profits, but also had some recent supports like hopes for rate cuts by central banks and easing inflation.
- The financial sector's weakness, particularly among major banks, contributed significantly to the losses experienced by the Australian market, as observed in the mid-market trading on Thursday.
- Amid the ongoing volatility in the Australian market, the businesses within the finance industry have been heavily impacted, with some key companies like Insignia Financial facing concerns around earnings and deal uncertainties.
