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While the market closed lower again today, which is becoming a feature of recent Mondays, the weakest part of the session was behind us early. Headline-driven selling dominated at the open, pushing the ASX 200 down toward ~8380, but that weakness was steadily absorbed as the day wore on, with buyers stepping back in and the index grinding around 70 points off its morning lows by the close.
The news flow is undoubtedly becoming more concerning, but from a market perspective, price action is showing a degree of resilience. In other words, despite an escalation in the conflict, we are not seeing a corresponding escalation in selling pressure.
The longer hostilities persist, the closer the market moves toward some form of resolution, and when that comes, equities are likely to respond positively. It is also worth remembering that the fundamental backdrop was reasonably supportive heading into this period, with earnings solid through the February reporting season locally and again at the December-quarter result season in the US. The next meaningful catalyst on that front comes in April, when US earnings begin to roll through once more.
- ASX 200: 8,461.00 / -55.28pts / -0.65%
- AUD/USD: 0.6868 / -0.09%
- Best sectors: Energy +2.29%, Utilities +1.40%, Materials +1.27%
- Worst sectors: Consumer Disc. −1.70%, Financials −2.23%, IT −3.16%
- Banks were the biggest drag on the index accounting for –52pts between the Big Four – Westpac (ASX: WBC) -4.05%, Commonwealth Bank (ASX: CBA) -2.83%, National Australia Bank (ASX: NAB) -1.76% and ANZ (ASX: ANZ) -1.62% all sold off.
- Tech dropped as the market continued to rotate away from growth stocks – WiseTech Global (ASX: WTC) -4.77%, Xero (ASX: XRO) -3.21% and NextDC (ASX: NXT) -1.40% all fell.
- Beach Energy (ASX: BPT) +1.96%, Santos (ASX: STO) +1.26% and Woodside Energy (ASX: WDS) +2.18% all gained as investors chased the rising oil price.
- Refiners also benefited, with Viva Energy (ASX: VEA) +2.02% and Ampol (ASX: ALD) +0.62% moving higher after the government temporarily halved the fuel excise.
- DroneShield (ASX: DRO) +0.77% has opened its European headquarters in Amsterdam to support growing demand for counter-drone systems across EU and NATO markets.
- Mining stocks also helped cushion the fall after aluminium prices jumped following attacks on Middle Eastern smelters – Alcoa (ASX: AAI) +8.59%, South32 (ASX: S32) +9.43% and Rio Tinto (ASX: RIO) +4.93%.
- Greatland Resources (ASX: GGP) +11.07% jumped after boosting the Telfer gold resource by 150% to around 8 million ounces following extensive drilling.
- Financial services group AMP (ASX: AMP) +3.20% rose after announcing a $150m on-market share buyback starting in April.
- Travel platform Webjet (ASX: WEB) +1.90% edged higher after revealing CEO Katrina Barry would depart after less than two years in the role.
- Oil rose +1.4% around $US101/barrel (WTI)
- Gold was up smalls during our time zone, trading $US4505/oz around our close.
- Asian markets were mixed: China +0.12%, Hong Kong –0.9% and the Nikkei -2.1%.
- Global Futures: S&P 500 E-Mini 0.00%, Dow E-Mini -0.10%, FTSE -0.29%.
