Australia, insurance, car, home, live, holidays

The laggers: Lithium developer Lake Resources led the declines with a 10 per cent drop,adding to its recent losses. Xero and WiseTech also led a big decline for the tech sector,vulnerable to the prospect of rising interest rates,closing 5.6 per cent and 4.8 per cent lower,respectively. The financial sector slipped 2.2 per cent,as all big four banks dropped,with ANZ shedding as much as 2.26 per cent,continuing its shabby year.

The lowdown: The prospect of an aggressive US Fed following Powell’s speech ensured it was a day of red on the Australian sharemarket and across Asia.

“It certainly sent shivers down the market to say,look,we’re still moving at a higher rate. We’ve still got inflation,and we’re still trying to go and get that under control,” Adam Dawes senior investment adviser at Shaw and Partners,said.

“He basically said there will be pain and that they won’t stop and can’t stop hiking until inflation moves a lot lower,” said Brian Jacobsen,a senior investment strategist at Allspring Global Investments.

Rate sensitive stocks,such as those in the tech sector,took a hit with shares of Xero and “market darling” WiseTech hit hard,dropping 5.84 per cent and 4.9 per cent respectively.

Andrew Forrest’s Fortescue delivered its second-biggest net profit of $US6.2 billion ($9 billion) after shipping a record 189 million tonnes of iron ore out of the Pilbara.

But despite what Dawes says is a “very good result and fantastic dividend”,the mining company slumped 4.78 per cent on today’s market.

“It’s certainly been pretty tough for the market to gain any kind of traction at the moment,” Dawes said.

Meanwhile,results from jewellery retailer Lovisa were the happy surprise on Monday,up by close to 60 per cent for 2022,with net profit after tax up 116.3 per cent to $59.9 million.

“That shows that potentially that discretionary market is looking really,really good ... so that means some discretionary money is still alive and well,” Dawes said.

Those retail results come off the back of ABS data released on Monday,which showed retail trade rising 1.3 per cent month-on-month in July,a 16.5 per cent increase when comparing July 2021. This was higher than CBA’s predicted 0.5 per cent increase,and is the seventh straight month retail trade has risen.

“Overall,inflation is still very stubbornly high and will continue to be. You would think over a longer period that might start to slow down as interest rates start to raise,but as we saw with Commonwealth Bank the other day,70 per cent of their customers have over two years worth of mortgage repayments saved up,which shows there is a lot of resilience in the market,” Dawes said.

Another win of the day was a2 Milk,which surged nearly 8 per cent to $5.30 in the early hours of today’s trading.

The jump came as the milk and infant formula marker outlined a renewed focus on building back its pandemic-battered Chinese daigou community while announcing a share buyback of up to $NZ150 million ($133.6 million).

“This was a fantastic result with that buyback they’ve got coming and,and I think that’s the reason why the market really liked a2 Milk,” Dawes said.

Dawes expects the energy sector and mining stocks,which has kept the Australian sharemarket outperforming other international sharemarkets in recent weeks,to remain resilient.

“We are obviously a commodity-based market,but certainly any kind of pullback will be healthy for companies like BHP,Rio Tinto and Fortescue at the moment as they’ve had such a fantastic run.”

Tweet of the day:

Quote of the day:

“Adore Beauty is also facing inflationary pressures around employee,freight and marketing costs,and consumer sentiment is more subdued,” the e-commerce company told investors,after it revealed that trading in the first seven weeks of the new financial year was down 28 per cent on this time last year.

With AP

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