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The stock market fell to its lowest level in nearly three weeks after Wall Street retreated ahead of key risk events and gas suppliers dried up under the threat of the government’s proposed price caps.
That S&P/ASX200 fell 49 points, or 0.68 percent, by mid-session.
Utilities Origin and AGL led the pullback as the federal government drew closer to imposing price caps on gas and coal. Miners, supermarkets and healthcare providers also withdrew. Gains in oil producers and real estate stocks cushioned the market from a deeper decline.
What moves the market
This morning’s loss was broadly in line with premarket readings after a dismal finish to Wall Street last week. That S&P500 The index fell 0.73 percent in late trade as investors trimmed exposure ahead of tomorrow’s Consumer Inflation Report and the Federal Reserve’s interest rate decision on Wednesday.
Economists expect the Fed to raise interest rates by half a point. Some commentators are awaiting another central bank warning that financial markets are overly optimistic about a near-term top in this interest rate cycle.
“We think markets are overly optimistic on rates after the first quarter and we expect [Fed Chair] Powell will adopt a more aggressive tone and the points will show higher interest rates for a longer period of time than what is currently being priced in by futures markets,” said Cliff Hodge, chief investment officer at Cornerstone Wealth.
Friday’s losses sealed Wall Street’s worst week in two months. The Dow fell 2.77 percent, the S&P 500 Index 3.37 percent and the Nasdaq Composite 3.99 percent. In comparison, Australia’s leading index lost a relatively modest 1.1 percent.
That ASX200 hit a six-month high in the first session in December but has since fallen in five of the last seven sessions. The index is down 1.6 percent so far this month. The decline accelerated after the Reserve Bank hiked interest rates and gave no indication of a pause when it next meets in February.
winning circle
Energy producers rallied as crude oil rose from a near 12-month low. Brent rough rose 55 US cents, or 0.7 percent, to $76.65 a barrel this morning.
Woodside Energy climbed 1.81 percent. Santos gained 1.05 percent.
lithium miner Sayona rallied 2.33 percent after receiving final approval to resume spodumene production at a Quebec joint venture next quarter. The miner acquired the mine last year along with Piedmont Lithium.
In the morning best return came from Megaport +4.02 percent, BrainChip +3.91 percent and Star Entertainment Group +3.35 percent.
shares in St Barbara and Genesis Minerals remained on a trading pause after miners announced plans to merge to create a regional gold powerhouse. St. Barbara will acquire all shares in Genesis through a Scheme of Arrangement to form a company called Hoover House, focused on the Leonara District of WA.
Genesis shareholders will receive 2.0338 shares of St. Barbara for every Genesis share they hold. St. Barbara will spin off its assets outside of the Leonara District into a new ASX listed company called Phoenician Metals.
kennel
Gas utilities Origin and AGL collapsed after the federal government pushed ahead Price cap suggestions for gas and coal. Prime Minister Anthony Albanese has asked Parliament to pass an emergency bill imposing a temporary cap of $12 per gigajoule on gas and $125 per tonne on coal. The prime minister said the cap could cut energy bills by $230.
origin energy fell 7.37 percent. AGL 2.31 percent lost. coal truck Aurizon 3.42 percent lost.
payment platform Beginner plunged 17.28 percent after takeover talks with Westpac and Potentia Capital Management ended with no deal. After conducting due diligence, Westpac decided against submitting an offer. Tyro broke talks with Potentia after extensive discussions failed to result in a proposal that the board believes “reasonably values” the company.
The board said it remains open to addressing any “credible” change-of-control proposal that represents compelling shareholder value. Potentia’s last offer of $1.60 per share valued the company at $875 million.
Rio Tinto came a step closer to acquiring Canadian company Turquoise Hill Resources after THR shareholders backed the proposed acquisition of the 49 percent of THR’s outstanding shares that Rio does not already own. The transaction is subject to Canadian court approval. Rio’s share price fell 0.74 percent
effort group fell 0.79 percent after the Competition Authority raised concerns about the hotel and Bottlo company’s proposed acquisition of the Beachfront Hotel in Rapid Creek, north of Darwin. The ACCC said the group already operated four BWS stores within a five-kilometer radius of the hotel.
Other Markets
A red morning on Asian markets The Asia Dow fell 0.85 percent, China’s Shanghai Composite 0.39 percent, Hong Kong’s Hang Seng 1.45 percent and Japan’s Nikkei 0.31 percent.
US futures trimmed a Sunday evening drop. S&P 500 futures were last down six points, or 0.15 percent.
gold Shed most of Friday’s gains and fell $7, or 0.4 percent, to $1,803.70 an ounce.
That dollar fell 0.14 percent to 67.69 US cents.
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