• ASX 200 fell below 7,000 before trimming its losses
  • All 11 ASX sectors fell
  • Aussie dollar sinks to a two year low

 

The ASX 200 briefly dipped below the 7,000 level earlier this morning, hitting a three-month low before bouncing back to close 1.22% lower at 7,034.

The local market had fallen by 1.8% at the opening bell, tracking heavy falls on Wall Street overnight where the Nasdaq slumped by more than 4%.

All 11 sectors fell today, with Energy and Mining being the biggest laggards (down by more than 2% each) as iron ore prices tumbled.

Data released yesterday showed that Chinese imports of iron ore fell by 13% in April, compared to the same period a year ago. The Chinese government is continuing to pursue a zero-Covid policy, as residents prepare for tighter lockdowns in Shanghai and Beijing.

On the back of this, the Aussie dollar has plummeted to US 69.6c, a level not seen since the height of the pandemic of July 2020.

The weak dollar will make imported goods more expensive just when electricity costs and interest rates are about to rise.

“Australia will be as insulated as any country from the Ukraine/Russia resource inflation surge that is yet to be fully felt by the global economy, but it won’t be fully immune to those downstream impacts,” said Oanda’s senior market analyst, Jeff Halley.

The gloomy prediction hasn’t dented local retail sales. According to data released by the ABS today, retail sales nationwide gained 4.9% YoY to a record $93.19 billion as people start dining out in cafes and restaurants again.

Meanwhile, all eyes will be on the US CPI data due for release on Wednesday (US time), which could decide the pace at which the Fed will raise rates this year.

 

BIG CAP WINNERS

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US fundie Pendal Group (ASX:PDL) rose 8% as first half profits increased 7.5% on pcp to $96.7 million. The fund manager also increased its dividend payout by 24%.

 

BIG CAP LOSERS

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Building services company Johns Lyng Group (ASX:JLG) was the worst performing large cap today, shedding 15% on no specific news.

Brainchip (ASX:BRN) dropped 13% and lost almost all the 15% it gained yesterday. On Friday, the company had responded to a speeding ticket from the ASX, where it said it wasn’t aware of any reason why the stock price had lifted. The BRN share price is now up by 14% in the last 30 days.