Technology companies, miners and real estate investment trusts (REITS) weighed the Australian sharemarket on Tuesday despite a positive lead from Wall Street overnight.
The S&P/ASX 200 was down 36.6 points, or 0.5 per cent, to 7039.9 at the start, as all sectors except healthcare traded in the red.
Wall Street has made a mixed start to the week. Credit: Reuters
Pro Medicus (up 8.1 per cent) led the gains after it won a $140 million contract with US-based company Baylor Scott & White Health, bolstering the broader healthcare sector (up 0.6 per cent). CSL (up 0.8 per cent) and Fisher & Paykel (up 0.7 per cent) also helped the sector to keep its head above the water in early trading.
Coal miners Yancoal (up 1.3 per cent) and Whitehaven (up 1.2 per cent) extended their gains along with fertiliser and explosives manufacturer Incitec Pivot (up 1.3 per cent) and QBE (up 1.1 per cent).
Meanwhile, information technology companies weighed the index with WiseTech shedding 1.8 per cent, NEXTDC losing 1.7 per cent and TechnologyOne declining 1.2 per cent.
Qantas extended its decline, dropping 1.7 per cent after it flagged additional cost pressures on Monday.
REITS (down 1.8 per cent) were also a drag on the local bourse as Goodman Group shed 1.5 per cent, Scentre lost 2.8 per cent and Mirvac slipped 2.1 per cent.
Iron ore heavyweight BHP (down 1.3 per cent) weighed the mining sector (down 1 per cent) along with lithium miner Liontown (down 4 per cent).
Wall Street clawed back some of its steep losses from last week, but September is still on track to be its worst month of the year despite Monday’s gains.
The S&P 500 rose 0.4 per cent, coming off its worst week in six months. The Dow Jones edged up by 0.1 per cent and the Nasdaq composite gained 0.5 per cent.
Oil-related stocks led the way, as Exxon Mobil rose 1.1 per cent and ConocoPhillips gained 1.6 per cent. As a group, energy stocks in the S&P 500 climbed nearly twice as much as any of the other 11 sectors that make up the index.
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While crude oil prices were mixed Monday, they’ve leaped sharply since the early summer.
The growing understanding that rates will stay higher for longer has pushed yields in the bond market up to their highest levels in more than a decade. That in turn makes investors less willing to pay high prices for all kinds of investments, particularly those seen as the most expensive or making their owners wait the longest for big growth.
In the near term, the US government may be set for another shutdown amid more political squabbles on Capitol Hill. But Wall Street has managed its way through previous shutdowns, and “history shows that past ones haven’t had much of an impact on the market,” according to Chris Larkin, managing director of trading and investing at E-Trade from Morgan Stanley.
On Wall Street, Amazon rose 1.7 per cent and was the strongest single force pushing up on the S&P 500. The company announced an investment of up to $US4 billion ($6.2 billion) in Anthropic, as it takes a minority stake in the artificial intelligence startup. It’s the latest Big Tech company to pour money into AI in the race to profit from opportunities that the latest generation of the technology is set to fuel.
Stocks of media and entertainment companies were mixed after unionised screenwriters reached a tentative deal on Sunday to end their historic strike. No deal yet exists for striking actors.
Netflix rose 1.3 per cent, while The Walt Disney Co. slipped 0.3 per cent. Warner Brothers Discovery dropped 4 per cent for the day’s largest loss in the S&P 500.
Also on the losing end of Wall Street were stocks of travel-related companies, which slumped under the weight of worries about higher fuel costs. Southwest Airlines sank 2 per cent, and Norwegian Cruise Line fell 3.1 per cent.
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In stock markets abroad, indexes slumped across Europe and much of Asia. France’s CAC 40 fell 0.8 per cent, and Germany’s DAX lost 1 per cent.
In China, troubled property developer China Evergrande sank nearly 22 per cent after announcing it was unable to raise further debt due to an investigation into one of its affiliates. That might imperil plans for restructuring its more than $US300 billion in debt.
China’s faltering economic recovery has already removed a big engine of growth for the world.
With AP
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