ASX News LIVE | ASX to Drop after Heavy Losses on Wall St; Biden’s Race Exit Adds to Volatility

Australian shares fell today, with the ASX 200 closing down by -0.50% to 7,931.7, with the materials, energy, and real estate sectors hit hardest.

This followed a broad sell-off in international markets as investors weighed President Joe Biden’s decision to end his re-election campaign. Wall Street indices had already fell on Friday before Biden stepped aside and endorsed Kamala Harris to run against Donald Trump, while the latest US stock futures showed little reaction to the news.

The Australian dollar has continued to slide this week, now down -1.60% in seven days, as Trump looked more likely as the election favourite. Traders are clearly expecting a Trump win to strengthen the US dollar.

In local markets, Mining stocks faced pressure as copper recorded its biggest weekly loss since 2022, and iron ore continued to slump after little positive news out of China after its big policy meeting last week.

BHP fell -0.50% and Fortescue lost -0.325, while South32 shares plummeted -12.3% after warning about the Worsley alumina refinery’s viability due to stricter environmental approvals.

The major market mover in the wider ASX was Droneshield, falling -19.5% as further pressure mounts on the company after a recent short-seller report. While gaining today was Oceania Healthcare, jumping +11.6%.

Looking ahead this week, we have important quarterly earnings for Alphabet and Tesla after the market closes on Tuesday (Wednesday AEST).

China has cut key policy rates to stimulate its slowing economy, following lower-than-expected second-quarter GDP growth and economic challenges.

The People’s Bank of China (PBoC) reduced its 7-day reverse repo rate and loan prime rate by 10 basis points each after the conclusion of the Third Plenum meeting.

Macquarie’s chief economist, Larry Hu, remarked on the market’s surprise at this move but thought it was necessary considering the sharp growth slowdown and pressure to meet annual targets.

Meanwhile, ANZ strategist ZhaoPeng Xing was less surprised but questioned the cuts’ impact, suggesting further reductions may be necessary if growth remains below 5%.

Both still expect China to struggle unless more action, with Mr Xing saying, ‘slowing momentum will likely continue for the rest of this year.’ and traders ‘cannot rule out another cut in Q4 if Q3 GDP remains below 5%’.

Cybersecurity company CrowdStrike [NASDAQ:CRWD] saw a huge drop in its stock price, closing down 11% after a major outage affected businesses worldwide.

The incident, which began early Friday morning, was caused by a defective update to one of CrowdStrike’s key products, the Falcon Sensor.

CrowdStrike CEO George Kurtz addressed the issue, stating it stemmed from ‘a defect found in a single content update for Windows hosts.’

The outage had far-reaching consequences, disrupting various websites and Australia’s major banks, grounding planes, and even forcing TV studios to pause broadcasting.

It is now considered the largest IT outage in history and could have longer-term consequences for the cybersecurity space.

CrowdStrike, which provides software to help companies manage their IT security environments, saw its shares open more than 14% lower before recovering slightly to close down 11%.

Microsoft also reported issues affecting its Azure cloud services and Microsoft 365 suite of apps, which caused its stock to close down 0.74%.

Around midday, the markets remain down, with the ASX 200 down -0.74% at 7,912.4 as markets join international markets in a broad selloff. A rotation out major tech stocks has come at a point of heightened volatility as markets weigh the impacts of Biden stepping down from the next election.

Only the Staples (+0.49%) sector is up around lunch as the large supermarket chains see modest gains. Woolworths is up +0.20% to $35.13 per share, while Coles gained +0.60% to $17.73.

Major miners saw selling pressure today as Iron ore and Copper futures slipped over the past week. Copper saw its largest weekly loss since 2022 as China’s latest major policy meeting failed to lay out concrete stimulus steps for the struggling Chinese economy.

BHP is down by -0.90%, Fortescue fell by -1.57%, and Rio Tino fell -0.68%.

In stand-out performances so far today, Oceania Healthcare is up +12.50%, while Droneshield saw heavy selling pressure, down -23.5%.

South32’s [ASX:S32] stock fell over 10% this morning following its warning about the Worsley alumina refinery’s future.

The company cited the WA government’s tougher environmental approval process as the main concern. As a result, South32 recorded a $US389 million ($581 million) impairment.

Its latest quarterly report was also published today, showing the company also downgrading some of its production guidance after Cyclone Megan disrupted its Groote Eylant operations in March.

South32 Chief Executive Officer, Graham Kerr said:

“We delivered another quarter of improved operating performance, achieving sequentially higher volumes across the majority of our operations, and remaining on track to achieve FY24 operating unit cost guidance.”

 

“The sale of Illawarra Metallurgical Coal is expected to be completed later this quarter, further strengthening our balance sheet, simplifying our business, reducing our capital intensity and unlocking capital to invest in our high-quality development projects in zinc and copper.”

In the background, we’ve seen copper futures fall ~5% in the past week due to weak signals from China. However, many people remain bullish long-term for copper demand as a critical metal in the transition to net zero.

Insignia Financial [ASX:IFL] has updated its FY24 outlook today, anticipating net revenue and EBITDA margins to surpass previously upgraded guidance. The company projects underlying profit for FY24 to range between $212 million and $218 million.

The company also said it had returned to positive net fund inflows in the latest quarter, with $189 million added.

As of June 30, funds under management and administration decreased by $1 billion to $311.3 billion (-0.3%).

Full details can be found here.

The stock is up by nearly 5% in this morning’s trading, at $2.50 per share.

Woodside Energy [ASX:WDS] announced today it has entered into a definitive agreement to buy Gulf Coast Driftwood LNG project for $US900 million.

The project is pre-finial investment decision and fully permitted. The project is located near Lake Charles in Louisiana and has a permitted capacity of 27.6 Mtpa.

For full details of the deal click here.

Woodside chief executive Meg O’Neill said today:

“The acquisition of Tellurian and its Driftwood LNG development opportunity positions Woodside to be a global LNG powerhouse,” said“It adds a scalable US LNG development opportunity to our existing approximately 10 million tonnes per annum of equity LNG in Australia.”

 

“Having a complementary US position would allow us to better serve customers globally and capture further marketing optimisation opportunities across both the Atlantic and Pacific Basins.”

Woodside is down by -1.63% on open this morning, trading at $28.73 per share.

Good morning. Charlie here,

The ASX 200 fell -0.81% to 7,971 on open as volatility continued to shake markets. It was a sea of red closing on Friday, with most major international indices down. Only the Shanghai Index SSE managed to post a +0.17% gain, while all other majors fell.

Meanwhile, the Third Plenum in China failed to wow the markets as Chinese leaders said the same, while data out of China continued to show a weakening property market and slow manufacturing growth. Copper and aluminium futures fell ~5% over last week as a result, while gold is climbing as a safety to the current chaos in markets.

Looking ahead this week, we have the Judo Bank Purchasing Managers’ Index on Wednesday, followed by Macquarie Group’s AGM on Thursday, offering insights into the conglomerate’s performance.

In the US, June’s Q2 GDP report on Thursday is expected to show modest growth around 2% or less, while PCE inflation is likely to be negligible.

These factors could influence future rate decisions. Major earnings reports include Alphabet and Tesla on Tuesday, with GE and Coca-Cola following.

An intriguing side event is Donald Trump’s address at the Bitcoin Annual Conference in Nashville on Thursday. His changing and seemingly positive views on crypto may attract attention from potential donors.

Name		Value	% Chg
Major Indices
	S&P 500	5,505	-0.71%
	Dow Jones	40,287	-0.93%
	NASDAQ Comp	17,726	-0.81%
	Russell 2000	2,184	-0.63%
Country Indices
	UK	8,155	-0.60%
	Germany	18,171	-1.00%
	Japan	40,063	-0.16%
	Hong Kong	17,417	-2.03%
	Euro	4,827	-0.88%

Name		Value	% Chg
Commodities (USD)
	Gold	2,445	+0.50%
	Silver	29.83	+0.61%
	Iron Ore	104.40	-0.20%
	Copper	4.2367	-0.80%
	WTI Oil	79.03	-1.23%
Currency
	AUD/USD	67.07¢	+0.21%
Cryptocurrency
	Bitcoin (USD)	68,179	+1.53%
	Ethereum (USD)	3,536	+1.01%