- Updated
- Business
- Markets
- World markets
ASX wobbles as Woolies trades ex-dividend, current account deficit widens
By Sumeyya Ilanbey
Welcome to your five-minute recap of the trading day.
The numbers
The Australian sharemarket was treading water on Tuesday after economic data showed that falling commodity prices have pushed Australia into its biggest current account deficit in six years, raising concerns about the strength of the local economy.
European markets took centre stage with Wall Street closed.Credit: Getty Images
The S&P/ASX 200 pared back some of its sharp losses in early trade to close 6.7 points, or 0.08 per cent, lower at 8103.2. Seven of its 11 industry sectors declined, with consumer staples (down 1.9 per cent) recording the sharpest losses as the shares of supermarket giants Coles and Woolworths both went ex-dividend.
The lifters
Financials and tech stocks recorded the strongest growth, rising 0.9 per cent and 1.2 per cent, respectively.
The big four banks all rose, with CBA up 1.1 per cent to hit a record high, NAB and Westpac were both up 0.7 per cent and ANZ added 1 per cent.
WiseTech was the best performing large-cap after its shares climbed 2.4 per cent, followed by Solomon Lew’s Premier Investments (up 1.8 per cent) and Harvey Norman (up 1.7 per cent).
The laggards
Woolworths lost 59¢, or 2.8 per cent, as it traded without the right to its final 97¢-a-share dividend for the first time. The nation’s largest supermarket this week agreed to sell its final 4.1 per cent stake in spun-off liquor business Endeavour Group, the owner of bottle shop chains Dan Murphy’s and BWS.
Endeavour shares shed 3 per cent. Ex-dividend Coles dropped 2.4 per cent.
Mineral Resources was the biggest large-cap laggard after its shares slumped 8.5 per cent to close at their lowest price since early 2021.
Pilbara Minerals (down 3.2 per cent) and Whitehaven Coal (down 2.8 per cent) rounded out the biggest decliners.
Mining giants BHP (down 1.7 per cent) and Fortescue (down 2.6 per cent) also tumbled after iron ore prices fell 4 per cent to below $US100 a tonne in Singapore.
The lowdown
Australia’s current accounts balance fell by $4.4 billion to a deficit of $10.7 billion in the June quarter, according to the Australian Bureau of Statistics, as exports of goods fell 4.4 per cent largely on the back of lower prices of iron ore and coal.
The current account deficit, which shows Australia sends significantly more money abroad than it receives from offshore, came in well above market forecasts, suggesting exports will contribute less than expected to the nation’s GDP figures to be released on Wednesday.
“This quarter’s current account deficit was the largest since June quarter 2018, reflecting continued falls in bulk commodity prices and higher income paid to non-residents,” said Tom Lay, the head of international statistics at the ABS.
Capital senior financial markets analyst Kyle Rodda said the ASX was “remarkably resilient” and would have been stronger if the big supermarkets had not gone ex-dividend.
“There’s a slight downside bias as sentiment remains cautious, however markets are mostly treading water ahead of a loaded week of US economic data. The non-farm payrolls report is the main show and will mark the crescendo to the trading week,” Rodda said.
“However, there’s a steady stream of data, beginning tonight, which could provoke volatility as we build up to the jobs report.”
In markets overseas, Wall Street was closed for the Labor Day holiday.
In Europe, the STOXX 600 index was little changed at 524.94 points, still hovering around last week’s record highs after data showed eurozone inflation fell to its slowest pace in three years. Germany’s DAX rose 0.1 per cent, London’s FTSE lost 0.2 per cent and the CAC in Paris added 0.2 per cent.
Stocks rose in Germany even as state elections saw wins for the far-right Alternative for Germany (AfD) and leftist populist Sahra Wagenknecht Alliance (BSW), a heavy blow for Chancellor Olaf Scholz’s already fragile ruling coalition.
Tweet of the day
Quote of the day
“I’m about fixing [corruption] because decent trade unionists … who work to improve the wages and conditions of their fellow members – people who give up their time because they’re passionate about helping their fellow workers – they deserve our respect,” Prime Minister Anthony Albanese said after ousted CFMEU officials launched a High Court challenge against the federal government’s decision to place the union into administration.
“The legitimate role of the trade-union movement is undermined wherever there is corruption… You can’t have a corrupt union official without having a corrupt employer, so we are cleaning up the industry, and we make no apologies for [that].”
You may have missed
Senior CFMEU figures secretly helped organised crime kingpin George Alex build a sprawling and corrupt labour hire empire, despite repeated warnings he was an underworld figure who had previously bribed union officials and ripped off both workers and the Australian Tax Office.
The extent of Alex’s corrupt dealings with the CFMEU can be laid bare after he was convicted this week of tax evasion and money laundering as part of an illegal scheme that federal police found relied on Alex’s success “leveraging contacts in the trade unions” and inside large building firms.
The Market Recap newsletter is a wrap of the day’s trading. Get it each weekday afternoon.