— Finance

ASX sinks again as Delta depresses investors

The ASX followed US markets lower, closing in the red for the second straight day as the highly infectious Delta strain spooked investors.

The Australian share market continued its negative run, closing firmly in the red for the second straight day as the Covid-19 Delta variant depressed investors.

The S&P/ASX200 finished 0.46 percent lower at 7252.2, while the All Ordinaries Index dropped 0.45 percent to 7525.8.

CommSec noted that the benchmark ASX200 index had been stuck between 7200 and 7400 points for a month, partly due to the Covid-19 lockdown uncertainty.

The brokerage said the local bourse’s 1.3 percent loss in two days was enough to wipe out all of last week’s gains. On Tuesday, it was looking worse in early trade, with the market down the better part of 1 percent, but losses were paid back, OMG chief executive Ivan Tchourilov said.

Tech stocks such as Zip Co led the market higher, with the buy-now-pay-later provider jumping 5.4 percent to $7.41. That was interesting, Mr Tchourilov said, given the major indices on Wall St including the tech-heavy Nasdaq fell overnight to their lowest levels in almost a month.

CommSec senior economist Ryan Felsman said surging global Delta variant infections had unnerved investors, stoking concerns that rising case numbers could lead to renewed lockdowns and a protracted economic recovery, with European markets also closing lower overnight.

Webjet slid 1.26 per cent to $4.69, Flight Centre declined 1.3 per cent to $14.31 and Qantas fell 2.37 per cent to $4.54 after Victoria’s lockdown was extended for another week while South Australia will enter its own seven-day lockdown from 6pm local time.

But the biggest drag on the ASX was mining stocks, with Rio Tinto weakening 2.67 percent to $124.42 and BHP retreating 2.5 percent to $49.24.

BHP reported its full-year production results, with Ord Minnett praising the overall development as of vital. At the same time, RBC Capital Markets said petroleum and metallurgical coal output was better than expected.

“Guidance for 2022 is a bit lighter than our forecasts … however, the most meaningful divisions of WA iron ore and copper are in line with our forecast,” RBC said.

Mr. Tchourilov said energy stocks felt the pinch after OPEC announced it was planning to end oil production cuts by September 2022. Woodside gave up 1.93 percent to $21.90, and Santos slumped 4.98 percent to $6.49.

Oil Search bucked the trend after issuing a statement “clarifying” it had received a merger proposal from Santos, which it had rejected.

The news came a day after Oil Search refused to answer a question on a conference call over the shock departure of chief executive Keiran Wulff about whether it had been approached by a prospective corporate suitor. “We certainly don’t comment on those types of things,” chairman Rick Lee told the call. “We’re very mindful of disclosure rules. At the point where a disclosure is appropriate, it will be made.”

Santos said in a statement the proposal would leave Oil Search with 37 percent of the merged group and Santos with 63 percent. Santos also said it had subsequently sought to engage the Oil Search board on the “logical combination” and “extremely attractive opportunity”.

But in its second statement for the day, Oil Search said it had advised Santos it was open to a revised bid and “at this stage no such proposal has been forthcoming”.

Oil Search surged 6.27 percent to $3.90, more than making up the 5.17 percent it shed on Monday after attributing Dr. Wulff’s sudden departure to his long-term medical condition but also saying the board had received complaints from staff that he had behaved in an “unacceptable” manner.

The company also revealed it no longer expected to progress its Alaskan oil project in the second half of 2021. Stockbrokers Morgans labeled the development and departure of Dr. Wulff “unsettling”.

Retailer JB Hi-Fi reported its preliminary unaudited full-year financial results, showing net profit had soared by 67.4 percent. Chief executive Richard Murray said the record earnings came after record sales. Earnings growth for The Good Guys chain was solid, up more than 90 percent. JB Hi-Fi shares rose 3.73 percent to $49.51.

Crown Resorts lost 2.6 percent to $10.46 after scathing closing submissions to the Victorian royal commission by counsel assisting Adrian Finizio, who said the company had lost public confidence in the wake of its money-laundering scandal and it was open to the commission to strip the casino giant of its Victorian gaming license.

Commonwealth Bank inched 0.07 percent lower to $97.61, National Australia Bank backtracked 0.7 percent to $25.47, and Westpac shed 0.69 percent to $24.52. Still, ANZ firmed 0.63 percent to $27.32 after announcing an on-market share buyback of up to $1.5bn. The Aussie dollar was buying 73.19 US cents, 53.67 British pence and 62.15 Euro cents in afternoon trade.

Gemma Broadhurst
Gemma Broadhurst is a 23-year-old computing student who enjoys extreme ironing, hockey and duck herding. She is kind and entertaining, but can also be very standoffish and a bit evil.She is an Australian Christian. She is currently at college. studying computing. She is allergic to milk. She has a severe phobia of chickens

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