ASX News LIVE | ASX Starts FY25 down, Lendlease Sells More Overseas Assets

The Aussie benchmark closed lower on today, with the ASX 200 falling -0.22% to 7,750.7 points.

Despite the overall decline, coal stocks surged following news of a production halt at Anglo American’s Grosvenor project in Queensland due to a fire.

Rival coal miners emerged as the day’s standout performers, with Coronado Global Resources jumping 8.9%, Whitehaven Coal rising 6.3%, and Stanmore Resources gaining 5.1%.

The suspension at Anglo American’s mine is expected to tighten the coal market, fueling the rally in coal stocks.

Iron ore futures in Singapore also saw an uptick, rising +1.5% to $US107.90 per tonne. This boost lifted mining giants, with BHP Group and Rio Tinto gaining 1.5% and 1.4%.

However, the technology sector dragged on the market, dropping -2.2%. WiseTech fell -5.2% and Xero declined -1.3%.

Healthcare stocks also struggled, with Pro Medicus down -5.3%, Cochlear falling -2.9%, and CSL dropping -0.9%.

Overall, seven out of eleven sectors closed in the red, as markets remain cautious of the RBA’s next move.

The latest Judo Bank Purchasing Manufacturing Index (PMI) shows a worsening situation in Australian manufacturing.

The June PMI fell to 47.2 points from 49.7, the fastest contraction since May 2020 and the fifth consecutive month of decline.

Source: Judo Bank

New orders plummeted, causing sharp drops in production and employment levels.

Manufacturers also reduced inventory and purchasing activities due to falling demand. While input costs rose due to higher raw material, currency, and transport expenses, the rate of inflation for both inputs and outputs slowed slightly.

The data paints a concerning picture of the manufacturing sector, with optimism about future prospects also heading down.

The Australian job market showed signs of cooling in June, with a notable decrease in job advertisements, according to the latest ANZ-Indeed Job Ads survey.

The report revealed a 2.2% monthly drop in job postings, contributing to a significant 17.6% year-over-year decline.

Callum Pickering, an economist at Indeed, forecasts this downward trend to persist throughout the year, saying:

“While job creation continues to soften, there are still a lot of jobs being created nationwide,” Mr Pickering said.

 

“That continues to help the nation deal with cost-of-living pressures and an otherwise challenging economic environment.”

 

“Job Ads dropped in June on the back of lower demand for cleaners, tradies and food service workers.”

 

“Over the past year though the decline in Job Ads has been relatively broad-based, with Job Ads down in 86% of occupational categories.”

The June decline was particularly pronounced in cleaning, trades, and food services sectors. However, the survey indicates a broader weakening across the job market, with 86% of occupational categories experiencing reduced job advertisements over the past year.

A significant fire at the Grosvenor coal mine in Moranbah, Central Queensland, continues to burn, with experts suggesting it could take weeks or even months to fully extinguish.

The incident, which began early Saturday morning, was triggered by an ignited methane leak at the longwall coal face.

Anglo American, the multinational that owns the mine, has reported no injuries resulting from the explosion. The company stated on Facebook:

“Our priority is to safely extinguish the underground fire, which emergency response teams are managing from the surface.”

 

“We are actively managing and monitoring the smoke released from the mine’s ventilation shafts and appreciate it may be causing concerns for Moranbah residents.

 

“Work has started to temporarily seal the mine from the surface, which is a critical step in stopping the smoke.

 

“We expect smoke will continue for a number of days, and we will provide regular updates as this situation progresses.

 

“Members of our senior leadership team have joined the local Moranbah response team to support the situation on the ground to ensure we can respond as rapidly and effectively as possible to this evolving situation,” Anglo American said.

The ongoing blaze at this major coal production site has sent ripples through the industry, causing share prices of rival mining companies to soar. So far we’ve seen gains from:

Coronardo Global Resources (+11%), Stanmore Resources (+5.5%) and Whitehaven Coal (7%) making the biggest gains on an otherwise subdued ASX 200.

CoreLogic has released its monthly house price report, revealing continued growth across most of Australia. The data shows that nationwide house prices rose by 0.7% in June, pushing the annual growth rate to 8%.

Perth emerged as the standout performer, with prices surging 2% over the month. This impressive growth has contributed to Perth’s remarkable 23% price increase over the past year.

Adelaide and Brisbane also posted strong results, with prices climbing 1.7% and 1.2% respectively.

Source: Core Logic

While most capital cities experienced growth, Melbourne bucked the trend. It was the only capital to see a decline in house prices, with a modest 0.2% dip recorded for the month.

These figures suggest that despite various economic challenges, Australia’s housing market remains resilient in most areas. However, the contrasting performance between cities underscores the importance of local market dynamics in shaping property values.

The benchmarks are down at midday, with the ASX 200 falling 0.46% to 7731.6.

Technology stocks led the downturn, dropping 1.8%, with WiseTech slipping 3.8%.

Investors are reacting to global election outcomes, particularly the French legislative election’s first round. The euro rose 0.2% to $US1.0740 as Marine Le Pen’s far-right party showed a smaller lead than anticipated.

Attention now turns to the upcoming UK election and local economic indicators. The RBA’s May policy minutes, due tomorrow, will be closely watched after Governor Michele Bullock mentioned discussing a potential interest rate hike. May retail data and building approvals are also expected on Wednesday.

Notable movements so far today are Metro Mining, up 10.64% in the wider ASX, while Strike Energy is down by -11.61% as investors react to their change of strategy, forgoing fertilizer plant plans to focus on gas peaking plants in WA.

WiseTech Global [ASX: WTC], the Australian logistics software powerhouse, saw its shares fall by -3.75% this morning as the tech sector follows the Nasdaq down.

This decline comes amidst broader market volatility and growing concerns about the global economic outlook.

Founded in 1994, WiseTech has become a key player in the logistics technology sector with its flagship CargoWise platform.

The company has seen significant growth in recent years, but today’s stock movement suggests investors may be reassessing tech’s near-term prospects.

Tech stocks have faced pressure lately as interest rate cut estimates and economic uncertainties persist.

The XTX tech benchmark is this morning’s worst performer, down by -1.78%, with other mega caps, Xero and NextDC, also down by around -1.70% in trading so far.

Lendlease [ASX:LLC] is continuing the execution of its new strategy, which involves retreating from international markets to return to its profitable Aussie roots.

Today the property company announced the sale of its US Military Housing business for $480 million.

Approximately 150 workers will transfer with the sale, and the proceeds will mean Lendlease will deliver an operating profit after tax of $105-120 million in 1H FY25.

This is the third sale of a major asset that has achieved a premium to book value, while some other European sales have seen losses for the group.

Lendlease CEO Tony Lombardo said:

“With $1.9 billion of transactions already announced, including the sale of US Military Housing, we have made significant progress towards our target of recycling $2.8 billion of capital in the next 12 months. As this transaction demonstrates, we continue to take a disciplined approach to capital recycling, achieving premiums to book value, as we balance speed of execution with achieving value for our securityholders.”

Lendlease Group shares are up by +1.48% in trading this morning at $5.49 per share. However, the company’s shares have been down by -29.16% for the past 12 months.

The ASX 200 is down by -0.58% to 7,722.1 in today’s open. It looks like for now the All Ords has found its local bottom while tech continues to fall after a shaky day on Wall Street last Friday.

Local stories that are moving markets; In an interesting comment the Reserve Bank’s Deputy Governor Andrew Hauser said that it would be a ‘bad mistake’ to make policy based on a single inflation report.

While the CPI print came in hotter-than-expected at 4.0% (above expected 3.8%) he thought that there were a number of key data points ahead of the August RBA meeting, saying,’there’s a lot for us to reflect on ahead of the meeting in August.’

The AUD fell after he spoke but traders are still strong on their bets of another hike before November, with the odds roughly at 50% according to the RBA rate tracker.

Next on the markets news we’ll look at the company updates.

The ASX 200 is starting FY25 down, with Futures pointing to a fall this morning, with ASX 200 Futures down -0.12% this morning.

After a weak lead from Wall Street and uncertainty in the European markets after far-right candidate Marine Le Pen handily won the first round of France’s snap elections.

Weak economic data from China also contributed to falling steel prices as the latest Chinese manufacturing is still looking weak, with PMI coming in at 49.5. That’s below the 50-point mark which is the divider between growth and contraction.

Major US benchmarks closed lower on Friday as quarter-end flows saw hedge funds and other traders shift away from some of the larger names.

The worst hit was Nike, which saw its worst day ever, falling nearly -20% after a poor earnings result.

US 10-year bond yields continued to climb, gaining 11bps to reach a three-week high of 4.40%. High enough to push down major commodity prices.

For Australia, we have retail sales figures and building approvals this week on Wednesday.

Thursday will bring us the trade balance, while on Friday, we have US jobs figures to shift markets for the end of the week.

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Major Indices
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