ASX slumps as miners, real estate investment trusts weigh

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ASX slumps as miners, real estate investment trusts weigh

By Millie Muroi
Updated

Welcome to your five-minute recap of the trading day and how experts saw it.

The numbers

Miners and real estate investment trusts (REITS) dragged down the Australian sharemarket on Friday after a week of gains, even as retail trade data pointed to a higher possibility of the Reserve Bank keeping interest rates on hold next week.

The ASX is down across the board on Friday.

The ASX is down across the board on Friday. Credit: Louie Douvis

The S&P/ASX 200 was down 52.3 points, or 0.7 per cent, to 7403.6 at the close, as all sectors except utilities traded flat or in the red.

Australian shares edged up marginally after retail trade data showed turnover slowed 0.8 per cent month-on-month in June, down from an 8.8 per cent increase in May, adding to the case that the RBA may pause rates.

The lifters

Utilities (up 0.1 per cent) was the only sector in the green on Friday as Origin Energy (up 0.6 per cent), AGL (up 0.3 per cent) and infrastructure investment company Infratil (up 1.2 per cent) all climbed.

Energy companies rallied in early trade after West Texas Intermediate oil futures rose above $US80 a barrel for the first time since April, but closed broadly flat as oil prices came off in afternoon trading. Heavyweight Woodside advanced 0.3 per cent.

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Healthcare companies were among the biggest large-cap advancers with ProMedicus lifting 2 per cent and EBOS Group adding 1.6 per cent.

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The laggards

REITS (down 1.9 per cent), which rallied on Thursday, was the weakest sector. Goodman Group lost 2.8 per cent, Vicinity Centres lost 2.7 per cent and Charter Hall declined 1.5 per cent. A fund managed by Charter Hall has sold the leasehold interest in the University of NSW’s administration facility in Kensington for $80 million to raise cash to repay redemptions in the $2.5 billion unlisted Charter Hall Direct PFA Fund. The fund owns 20 small office blocks in its portfolio.

All four major banks traded lower including CBA (down 1 per cent), NAB (down 0.3 per cent) and Westpac (down 0.3 per cent) and ANZ (down 0.1 per cent)

Gold miners were also weaker as a strong US dollar weighed on the gold price. Evolution Mining (down 2.1 per cent), Northern Star (down 1.5 per cent) and Newcrest (down 1.8 per cent) were among the biggest large-cap decliners.

Iron ore heavyweight Fortescue shed 5.4 per cent as the iron ore price declined 3.6 per cent overnight.

The lowdown

Bell Direct market analyst Grady Wulff said despite the favourable retail sales data on Friday, markets were still factoring in a 25 basis point rate hike and remaining cautious ahead of earnings season.

“Retail sales is under control, but wages and services inflation remains sticky, so there could be further rate hikes to come to get them under control,” Wulff said.

“Reporting season kicks off on Monday so investment and trading volumes have been down in the last few weeks. Investors have been holding back to see how companies fared through the higher interest rate and inflation environment.”

Wall Street lost steam in the afternoon session.

Wall Street lost steam in the afternoon session. Credit: AP

Wulff said consumer discretionary stocks closed lower after the weaker retail sales data, and that interest-rate sensitive sectors such as REITS also declined.

Utilities stocks were broadly stronger, Wulff said, because they were more defensive, and investors were shifting out of riskier stocks ahead of reporting season.

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