Selloff in energy, materials stocks drags ASX lower on Monday trade

A selloff in mining and energy stocks dragged the Australian sharemarket sharply lower on Monday in a “punchy session” to kick off the week.

The benchmark ASX200 slumped 62.3 points, or 0.8 per cent, to close at 7733.7 points while the broader All Ordinaries index fell 0.81 per cent, or 64.8 points, to finish at 7975.1.

Tech stocks slipped 0.1 per cent to finish at 3089.2.

The Aussie dollar gained 0.1 per cent against the Greenback to buy US66.4c at the closing bell.

The selloff was broad, with 10 of 11 industry sectors ending in the red, led by energy with a 1.86 per cent fall.

Energy stocks were pummelled by a rising US dollar, which acts as a headwind for energy prices.

Oil and gas giant Woodside Energy shed 2 per cent to close at $26.97 a share, while Santos fell 1.57 per cent to $7.50, Beach Energy declined 1.67 per cent to $1.48 and petroleum refiner and retailer Ampol slid 1.8 per cent to $32.21.

Materials stocks were also hit hard on continued weakness in Asian iron ore prices.

“It’s been a tale of two sectors, mainly, energy and materials,” IG market analyst Tony Sycamore said.

“We can point to consumer discretionary, a couple of bombshells going off there, Cettire and City Chic.

“But the heavyweight materials sector, it has hit a fresh eight-month low today with falls in the big miners like BHP, Fortescue, Rio, and that’s on the back of some weakness in the iron ore price in Asia.

“The Chinese futures exchange has got it down about 3.4 per cent at the moment, the Singapore exchange has it down a fraction over 2.5 per cent back trading around $102 a tonne.”

BHP fell 0.82 per cent to $42.43 a share, while Rio Tinto declined 1.05 per cent to $118.99 and Fortescue tumbled 2.07 per cent to $21.26.

Mr Sycamore also credited end-of-financial-year repositioning for Monday’s broad selloff, with four trading day left until the end of FY24.

“There is probably a bit of tax loss selling hitting the market as well that needs to be mopped up before the end of this week,” he said.

The big banks all fell, led by ANZ with a 1 per cent fall to $28.65.

Commonwealth Bank slipped 0.69 per cent to $126.80, Westpac edged down 0.33 per cent to $27.15 and NAB fell 0.69 per cent to $25.96.

In corporate news, there were some bombshell announcements and stunning price movements in consumer and retail stocks.

Myer soared 20.16 per cent to hit 77.5c a share after announcing it will explore a merger with Premier Investments, which owns the Just Jeans and Jay Jay Brands.

Myer said a merger could deliver “significantly enhanced scale, revenue and growth opportunities” for shareholders.

While Myer soared, luxury fashion business Cettire went the other way, tanking 49.33 per cent after delivering a trading update that warned of “softening demand trends” in global online luxury.

Embattled gaming company Star Entertainment plunged 4.08 per cent to 47c after forecasting a fall in revenues to between $1.65bn and $1.68bn.

“Current trading conditions reflect the challenging economic environment and cost of living pressures,” the company said.

“Group revenue for Q$ FY24 is expected to be 4.3 per cent below the previous quarter (Q3 FY24 and 3.3 per cent below the prior corresponding period (Q4 FY23).”

The top gainer on the ASX200 was Myer target Premier Investments, which leapt 6.88 per cent to $32.

The largest laggard was healthcare business ResMed, which slumped 13.2 per cent to $27.74.