Australian sharemarket tumbles as ‘choppy, volatile’ trade trend continues amid lack of enthusiasm

Rebecca Le MayNCA NewsWire
Domino’s Pizza announced several significant executive appointment and “twin-region structure” news.
Camera IconDomino’s Pizza announced several significant executive appointment and “twin-region structure” news. Credit: News Limited

An energy sector surge couldn’t stop the Australian sharemarket tumbling deeply into the red as a volatile trade trend continued, with investors showing a distinct lack of enthusiasm.

The benchmark S&P/ASX200 index slumped 1.47 per cent to 7275.6 while the All Ordinaries Index fell 1.43 per cent to 7580.7.

CommSec analyst Steven Daghlian said the losses accelerated throughout the session.

“We did have the best start to a new week since the second of August just yesterday but today’s decline is certainly more than enough to wipe out those improvements,” Mr Daghlian said.

“There has been a lack of enthusiasm in markets recently. Markets have also been quite choppy and volatile, and still very much on track to fall back in September after 11 months of gains.”

A major drag on the local bourse was biotech heavyweight CSL, which dropped 3.85 per cent to $294.47.

However, energy stocks were big winners due to a continued lift in the oil price.

“You can put this off the back of growing fears of an energy shortage across Europe and parts of Asia heading into winter,” Mr Daghlian said.

OMG chief executive Ivan Tchourilov said China was stockpiling, not wanting a rerun of last year’s winter shortage.

“Constraints on the global supply chain due to Covid have led to significant demand-pull inflation, so we can expect to see inflated oil prices for at least the next few months,” Mr Tchourilov said.

Oil Search spiked 7.06 per cent to $4.40, Santos surged 5.64 per cent to $7.12, Woodside jumped 5.03 per cent to $24.03 and Origin climbed 5.32 per cent to $4.75 after pouring more money into UK renewable energy company Octopus to maintain its 20 per cent stake.

Beach Energy dazzled after holding an investor briefing, a day after inking a draft agreement with BP for its share of LNG from the Waitsia stage two project in Western Australia, rocketing 10.53 per cent to $1.36.

“It also today flagged increased production in coming years,” Mr Daghlian said.

Beach announced two directors would retire from the board at the November 10 annual general meeting, including Ryan Stokes, the son of billionaire Kerry Stokes, who is a representative of major shareholder Seven Group Holdings.

Coal miners performed strongly as prices for thermal coal, which is used to generate electricity, also rose ahead of the northern winter.

Whitehaven gained 6.52 per cent to $3.27 while Yancoal added 3.9 per cent to $2.66.

“The price of iron ore has also jumped close to 8 per cent in the past day, which means it’s on a four-day winning streak,” Mr Daghlian said.

“This has been attributed partly to restocking that’s taking place in China at the moment: one of the main reasons for this is ahead of the week-long national holidays, which kick off this Friday.

“Some companies are perhaps stocking up on iron ore.

Fortescue Metals AGM
Camera IconFortescue was sold off amid broker concern about ‘management churn risk’ while its bold Fortescue Future Industries has given them plenty to mull over. Colin Murty/The Australian Credit: News Corp Australia

“But (it’s) not really flowing through to iron ore miners, which have been hit quite hard because of the trend lower in iron ore prices, which - big picture - have fallen about 25 per cent this month because of restrictions that have generally been in place in China to try to limit pollution ahead of February’s Winter Olympics.”

Rio Tinto weakened 2.99 per cent to $97.47, the more diversified BHP backtracked 2.25 per cent to $36.87, Champion Iron subtracted 2.6 per cent to $4.88 and Fortescue slid 5.59 per cent to $14.87.

Credit Suisse pointed to reports that some recent Fortescue management departures were due to bonus disputes.

“We also note that FMG’s CEO last Friday sold about 65 per cent of her shares (excluding performance rights), which in our view further highlights the management churn risk at FMG,” Credit Suisse said.

Morgans has a “reduce” recommendation on the miner - which is pushing to achieve carbon neutrality within its operations by 2030 through its Fortescue Future Industries division - giving it a target price of $14.15.

Mr Tchourilov said shareholders in iron ore stocks may have spied an opportunity to close out their positions at a favourable price, triggering a sell-off.

“Gold miners were also included in the sell-off, despite stability in the spot and futures price,” he said.

Evolution Mining slid 6.44 per cent to $3.34, Northern Star Resources declined 4.29 per cent to $8.26 and Chalice Mining went south by 2.33 per cent to $6.70.

N39SE401 DOMINO`S PIZZA STORE, PRAHRAN. PIC FOR OUR JOBS 1001 CAMPAIGN TO RUN IN ALL PAPERS. DOMINO`S PIZZA WANTS 1000 NEW EMPLOYEES AUST-WIDE. PIC OF RYAN, STATE MANAGER WHO WORKED HIS WAY UP FROM DELIVERY BOY, WITH STAFF AT PRAHRAN WHERE THEY HAVE JUST STARTED DELIVERING. Pictured is State Manager Ryan De Vink
Camera IconDomino’s Pizza announced several significant executive appointment and “twin-region structure” news. Credit: News Limited

Domino’s Pizza shed 2.15 per cent to $155.34 after announcing Australia-New Zealand chief executive Nick Knight would retire from the fast food giant he started working for as a teenager in regional NSW.

Group chief executive and managing director Don Meij paid tribute to “a true Dominoid”.

David Burness, who started as a delivery driver for then Silvio’s Dial-A-Pizza in 1991 before progressing to a franchise consultant when the Domino’s brand was acquired, is taking on Mr Knight’s role.

In the travel sector, Flight Centre continued its tremendous run in September on hopes of a resumption in movement over coming months, lifting 1.18 per cent to $21.52.

ANZ dipped 0.54 per cent to $27.62, Commonwealth Bank eased 0.56 per cent to $104, National Australia Bank gave up 0.33 per cent to $27.49 and Westpac declined 0.59 per cent to $25.31.

In economic news, Australian Bureau of Statistics data showed retail turnover fell 1.7 per cent in August, with each of the eastern mainland states suffering falls in line with their respective level of lockdown restrictions.

The Aussie dollar was buying 72.96 US cents, 53.24 British pence and 62.41 Euro cents in afternoon trade.

Originally published as Australian sharemarket tumbles as ‘choppy, volatile’ trade trend continues amid lack of enthusiasm

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