Investors ‘holster guns’ as ASX dips

The Australian sharemarket didn’t take its usual lead from the US and instead followed European markets lower, snapping a four-day winning streak.

The benchmark S&P/ASX200 index dropped 0.28 per cent to 7384.5, while the All Ordinaries Index shed 0.23 per cent to 7689.4.

OMG chief executive Ivan Tchourilov said the negative trade was in response to a downturn in European markets overnight due to the rise in Covid cases.

“These rises are bringing lockdowns back in, which could hamper the much-needed Christmas period spending,” Mr Tchourilov said.

“Investors appear to be keeping their guns holstered until we get a better idea of how Christmas and New Year’s Eve will look.

“We enjoyed a brief respite from checking when and where we could be at certain times.

“Unfortunately, it looks like our holiday plans could be back in the hands of state leaders … Santa’s clause might be that you’re not coming to town any more.

“On the other hand, if we can successfully navigate the new strain, we may still finish the year with a bang and a yeehaw.”

But Wall Street firmed overnight.

“The S&P500 is near a record high, with the index climbing above 4700 last night in another tech-driven rally,” IG market analyst Kyle Rodda said.

“The justification remains that the Omicron variant, based on some very preliminary data, is far milder than previous strains.

“On top of that, the likes of Pfizer and BioNTech have stated early studies show their vaccines offer some protection against the variant.

“It still seems a bit premature to put Omicron in the ‘who cares?’ basket.

“The World Health Organisation have come out and said as much in the last day.”

Locally, the relief rally looked like “it’s done its dash”, Mr Rodda said.

On the local tech scene, Appen rose 3.19 per cent to $9.72, but Xero lost 3.2 per cent to $140.99, while Zip declined 4.16 per cent to $5.07 after rocketing over the previous two sessions on the back of a trading update that found favour with brokers.

Laybuy continued to plunge, sinking 11.43 per cent to 15.5 cents.

Mr Tchourilov said there wasn’t any significant movement on a sector-by-sector basis on the local bourse.

Rio Tinto softened 0.94 per cent to $95.80, BHP backtracked 1.2 per cent to $40.20 and Fortescue lifted 1.5 per cent to $18.25.

Australia’s biggest carbon emitter, AGL, put on 4.66 per cent to $5.84 a day after partnering with Fortescue Future Industries to look into a potential green hydrogen plant at two of the energy company’s coal-fired power stations in NSW’s Hunter Valley.

Vulcan Energy soared 13.89 per cent to $11.07 after inking a binding lithium hydroxide sales deal with Volkswagen Group, the world’s biggest carmaker by revenue and the largest company in Germany.

Oil Search dipped six cents to $4.14 after announcing the National Court of Papua New Guinea had approved its planned merger with Santos.

Cleanaway Waste Management inched two cents lower to $2.92 after receiving Australian Competition and Consumer Commission approval to proceed with its acquisition of a portfolio of strategic post-collection assets in Sydney from Suez.

Still on approvals, Sydney Airport gained 2.87 per cent to $8.59 after the ACCC said it saw no reason to block its acquisition by a private equity consortium as the monopolistic nature of Australian air travel meant there was little competition to be eroded.

Seven West Media declined 3.9 per cent to 61.5 cents after being given the all clear by the ACCC to complete its purchase of Prime Media Group.

Redbubble burst, with the only news coming from UBS coverage, Mr Tchourilov said.

“Their analysts commenced coverage with a target price at $3.45 and neutral weighting,” he said.

“Investors would have preferred more bullish sentiment in the rating and subsequently sold out.

“Redbubble did well through Covid, not dealing with brick-and-mortar costs like other retailers.

“The potential for an Omicron lockdown could put buying power behind the price if investors are forced to return to online shopping.

“We may see the return of Covid revenues pumping a new bubble, red or otherwise.”

Shares in the printed-on-demand online marketplace tanked 9.3 per cent to $3.02.

Commonwealth Bank firmed 0.2 per cent to $98.16, National Australia Bank gained the same amount to $28.69, Westpac shed 0.24 per cent to $21.02 and ANZ dipped five cents to $27.61, after agreeing to pay a $25m penalty in court action launched by the corporate watchdog.

It relates to benefits including fee waivers and discounts not being applied under its Breakfree package, as well as system errors affecting offset account calculations, ANZ said.

The bank said the proceeding largely related to issues raised at the 2018 Hayne royal commission and “while ASIC has not alleged deliberate conduct, ANZ acknowledges its conduct fell short of expectations”.

The Aussie dollar was fetching 71.84 US cents, 54.35 British pence and 63.38 Euro cents in afternoon trade.