ASX200 slumps into the red on Wall St, materials sell off

The local sharemarket fell on Friday on the back of a mining wobble and simmering unease on Wall St.

The benchmark ASX200 lost 55.2 points, or .067 per cent, to close at 8150, while the broader All Ordinaries index fell 57.7 points, or 0.68 per cent, to settle at 8416.6.

The sell off was broad based, with nine of 11 industry sectors ending in the red, led by materials with a 1.18 per cent tumble.

The big miners all retreated even as Singapore iron ore futures continued to hover around US$109 a tonne.

BHP declined 1.74 per cent to $44.58 a share, Rio Tinto shed 1.87 per cent to $123.68 and Fortescue fell 1.1 per cent to $19.76.

“The materials sell-off could be more to do with technical factors than anything fundamental,” StoneX market analyst David Scutt said.

“Looking at what has been happening on the likes of the Nikkei and some of the other regional bourses, there is some evidence starting to accumulate that we are seeing capital that was parked outside of China to try and get exposure to China now getting rerouted back towards the mainland.

“That’s just a sense you can see with some of the capital flows out there.”

The financials sector also retreated, losing 1.04 per cent.

Commonwealth Bank fell 1.39 per cent to $132.74, NAB lost 1.54 per cent to $36.43 and Westpac slumped 1.86 per cent to $30.14.

ANZ shed 1.46 per cent to $29.64 after announcing an $85m class action settlement over allegedly predatory practices in its former car loans business.

The settlement is without admission of liability, the bank said.

“Valuations are very stretched across the financial sector but that’s been known for a long period of time,” Mr Scutt added.

Oil prices rallied more than 5 per cent overnight Thursday after President Biden confirmed there had been discussions of a potential Israeli strike on Iranian oilfields.

Australia’s energy sector lifted 1.84 per cent in response, with Woodside Energy gaining 2.23 per cent to $26.64, Santos lifting 2.1 per cent to $7.30 and Beach Energy rising 1.2 per cent to $1.27.

WA gas producer Strike Energy soared 9.52 per cent to 23c.

“We remain of the view the most likely response will be strategic Israeli strikes on critical Iranian weapons factories and military objectives with oil infrastructure left untouched,” IG markets analyst Tony Sycamore said.

“Nonetheless, the situation is fluid and taking out oil infrastructure would send a powerful message.”

Friday’s fall followed an uneasy session on Wall St overnight Thursday, with the Dow Jones losing 184 points to 42,011, the S and P 500 index slipping 0.17 per cent to 5699.94 and the tech-heavy Nasdaq ending flat at 17,918.

The US reports non-farm payrolls data on Friday night, which should provide further guidance for global markets.

“The payroll support is going to be a lot more important in terms of market direction,” Mr Scutt said.

“That is going to be the key event. We can’t price the outcome for the Middle East but you’ve got a much more binary outcome when it comes to payrolls.”

The top gainer on the ASX200 was Light and Wonder, leaping 7.78 per cent to $140.69.

The largest laggard was lithium miner Liontown Resources, which slumped 3.89 per cent to 74c.

The Aussie dollar gained 0.09 per cent to buy US68.4c at the closing bell.