ASX falls 0.7 pct as miners, banks fade

·4-min read

The Australian share market has clawed back some of its morning losses but still closed lower after iron ore prices tumbled to a 10-month nadir overnight on demand fears from China.

After falling by 113 points, or 1.7 per cent, in the first 45 minutes of trading, the benchmark S&P/ASX200 index climbed more or less steadily to finish Friday down 45 points, or 0.68 per cent, at 6,605.6.

The broader All Ordinaries closed down 50.6 points, or 0.74 per cent, at 6,798.

The ASX200 was down 1.08 per cent for the week, with materials once again the worst-performing sector.

The mining sector dropped 3.2 per cent on Friday to finish the week down 6.1 per cent, its sixth consecutive week of declines.

Chinese economic data released at midday Friday showing the world's second-largest economy grew just 0.4 per cent in the second quarter, well below expectations for a 1.0 per cent rise, did nothing to help commodity prices.

"China's adding to angst I think locally, because on the one hand they're talking up a big stimulus program to fire up the economy, and on the other hand, they're still pursuing a zero-COVID policy," Betashares chief economist David Bassanese told AAP.

"So it's fair to say that the Chinese outlook is very mixed and uncertain at the moment."

Rio Tinto finished down 2.9 per cent to $93.27 after the miner reported that skilled labour shortages and inflation had hit its second-quarter earnings.

"There might be a positive read on this quarter from costs not moving higher however there isn't too much else to get too positive on and this was only enabled by the very weak Australian dollar," RBC Capital Markets analyst Tyler Broda wrote in a note.

BHP and Fortescue likewise hit their lowest level this year, with the former down 3.5 per cent to $36.10 and the latter falling 6.2 per cent to $16.33.

Goldminers Newcrest, Northern Star and Evolution were all down by around two and a half per cent, hitting multi-year lows, as the price of the precious metal danced around a one and a half year low of $US1,700 an ounce.

Several of the big banks ended mostly lower after US banking giants JPMorgan and Morgan Stanley reported a bigger-than-expected drop in second quarter profits as a pandemic-era boom in listings, mergers and acquisitions came to an end.

ANZ fell 1.3 per cent to $21.64, Macquarie dropped 1.8 per cent to $167.99 and Westpac dipped 0.2 per cent to $19.90. But CBA was basically flat at $93.27 and NAB rose 0.5 per cent to $28.45.

Pendal Group was down 7.8 per cent to a nine-year low of $3.76 after the fund manager announced funds under management dropped to $111 billion in the June quarter, from $124.9 billion.

Blood products giant CSL was up for an 11th straight day, rising 1.0 per cent to an eight-month high of $299.25.

"CSL's probably benefiting from a weak Aussie dollar - and the moves are now going towards defensive, it's seen as a defensive stock, so that would be supportive," Mr Bassanese said.

In tech, Wisetech Global was up 3.4 per cent to $44.13 after upgrading its full-year revenue guidance.

The global logistics company said it expects to earn between $310 million and $320 million, up from February's estimate of $275 million to $295 million.

Jumbo Interactive dropped 15.0 per cent to $12.31 after digital lottery company warned that its cost of goods would increase as The Lottery Corporation raises its service fees on lottery tickets sold.

The Australian dollar meanwhile was buying 67.31 US cents, from 67.51 US cents at Thursday's close.

"The Aussie dollar is looking like its going to weaken down to 62, 63 cents, having now broken some support levels," Bassanese said. "That's going to be interesting to watch."

ON THE ASX:

* The benchmark S&P/ASX200 index on Friday closed down 45 points, 0.68 per cent, at 6,605.6.

* The broader All Ordinaries dropped 50.6 points, or 0.74 per cent, to 6,798.

CURRENCY SNAPSHOT:

One Australian dollar buys:

* 67.31 US cents, from 67.51 US cents at Thursday's close

* 93.34 Japanese yen, from 93.95 yen

* 67.18 Euro cents, from 67.53 cents

* 56.93 British pence, from 57.11 pence

* 109.79 NZ cents, from 110.59 cents

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