Shares fall; Macquarie, Fortescue sink on results

The Australian sharemarket tumbled the most in six weeks, led by a sell-off in the tech sector and as weaker commodity prices extended a tough month for mining companies.

On the day the S&P/ASX 200 dropped 1.3 per cent, or 102.5 points, to 7861 points, its worst day since June 11 and lowest close since July 10 as all 11 sectors finished in the red.

It followed a heavy sell-off on Wall Street overnight that sent the tech-heavy Nasdaq tumbling more than 3 per cent, the most since 2022, after lacklustre earnings from Tesla and Alphabet.

Tech woes

On the ASX, the tech sector was the hardest hit, falling 2.7 per cent as traders took profits and worried over the inflated valuations of the US mega cap tech stocks.

Block-owner Afterpay fell 6.7 per cent to $93.98, while cloud accounting business Xero dropped 3.5 per cent to $131.10 and software logistics group WiseTech retreated 3.2 per cent to $92.02.

The materials sector tumbled another 1.6 per cent, and is now down 4.1 per cent in five days as copper, oil, gas, gold, and silver all extended losses over the session. That hit the Australian dollar, which lost another 0.6 per cent to buy US65.43¢, the lowest level since May 1.

“The domestic factors working against Australian shares are that earnings are relatively mooted compared to globally and the [Reserve Bank] is still the only central bank contemplating rate rises apart from Japan,” said David Bassanese the chief economist at BetaShares.

“US earnings growth expectations are 10 to 12 per cent, but in Australia, it’s around 5 per cent as the energy and resources sectors are going to drag.“

Mining giant Fortescue Metals lost 5.5 per cent to $20.14 after it used its June quarter production report to flag that the cost of mining iron ore in Western Australia could rise by almost 10 per cent in the next year.

The iron ore major’s value has now fallen in seven of the past eight trading sessions. BHP lost 0.9 per cent to $41.19 and Rio Tinto dropped 1.4 per cent to $112.81.

The gold miners were the only bright spot on the market, with Newmont finishing up 1.7 per cent to $72.62 as gold fetched $US2374 an ounce at the closing bell.

Stock movers

In corporate news, investment bank Macquarie said a weak quarter for its investment banking division dragged down earnings in an otherwise flat result.

“We think the update reads worse than the market expected, with the implied [net profit] performance down on a prior corresponding period basis,” said UBS. Macquarie’s shares finished down 3.4 per cent to $201.61.

ANZ Bank also updated the market on investigations into its data reporting, allegations around a 2023 bond transaction, and conduct matters in its Sydney dealing room. Its shares lost 0.6 per cent to $29.32 as the broader financials sector dominated by the big banks lost 0.8 per cent.

And jobs marketplace Seek lost 1.7 per cent to $20.20 after it wrote down the value of its Chinese marketplace Zhaopin by $141 million in an outcome it blamed on China’s weak economy.