People walking past a Westpac sign.

ASX slips, Westpac jumps after dividend improvement and planned spending cut

Australian stocks fell, dragged lower by mining stocks, as investors generally maintained a cautious stance amid fears of rate hikes and as tighter COVID-19 restrictions in Shanghai fueled worries about a possible recession. .

Chinese authorities have tightened the lockdown in Shanghai that they imposed more than a month ago as part of their tough response policy to the COVID-19 hitting economic activity.

On the national stock exchange, the ASX 200 closed 85 points, or 1.2%, at 7,121, with the real estate, technology and materials sectors leading the losses.

The Australian dollar fell below 70 US cents for the first time since January.

Miners followed lower iron ore prices and fell 2.5%.

Sector heavyweights BHP, Rio Tinto and Fortescue Metals Group lost between 1.3% and 5.8%.

Financial services fell 0.3% while Westpac gained 3.2% to $24.60 after reporting first-half cash profit of $3.1 billion.

The bank said continued pressure on margins from competition in the mortgage business led to a more than 12% drop in profits in the first half from a year ago, but it expected lower spending in the second half, with its cost reset plan in full. to balance.

The company also declared an interim dividend of 61 cents per share, up from 58 cents last year.

Suncorp fell 0.3% to $11.28 after reporting growth of $803 million in its home loan portfolio in the March quarter.

Magellan shares plunged 8.4% after news broke that it was selling its shares in fast-food take-out chain Guzman y Gomez (GYG) for $140 million in cash.

Tech stocks, which fell 3.2%, were the biggest losers from the benchmark, while gold stocks fell 3.4%.

National energy inventories rose 0.5% after crude prices rose last week due to supply issues.

Among the worst performers were Nvonix (-12.3pc), Imugege (-11.1pc), News Corp (-8.3pc), Block (-6.2pc) and Telix Pharmaceuticals (-7.3pc ).

On the other hand, Domino’s Pizza climbed 2%, CSL gained 0.8% while Polynovo rose 3.3%.

Global markets are declining

Trading was volatile on Wall Street on Friday.

Major indexes briefly dipped into the green and the Nasdaq fell 2.7%.

The Nasdaq and S&P 500 posted their fifth consecutive week of declines, and the Dow Jones its sixth.

It is the longest losing streak for the S&P 500 since mid-2011 and, for the Nasdaq, since late 2012.

The Dow Jones Industrial Average fell 0.3%, the S&P 500 lost 0.6% and the Nasdaq Composite fell 1.4%.

“The market is focused on the Fed being behind the curve and that’s why the market is down,” said Keith Lerner, chief market strategist and co-chief investment officer at Truist Advisory Services.

Fed funds futures are priced at about a 75% chance of a 75 basis point interest rate hike at the Fed’s monetary policy meeting next month, even after the chairman of the Fed, Jerome Powell, said on Wednesday that the US central bank was not considering such a decision.

The pan-European STOXX 600 index fell 1.9% as regional stocks recorded their worst week in two months.

The MSCI indicator of global equity performance lost 1% and emerging market equities lost 2.6%.

Oil prices climbed for a third straight session, dispelling worries about global economic growth as looming European Union sanctions on Russian oil raised the prospect of tighter supplies.

Brent Crude Oil was down slightly this morning, trading at US$111.88 a barrel.

ABC/Reuters

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