Markets at a glance 4 September

Around the grounds

It’s a sea of red on the Australian share market as lacklustre data from the U.S. dampens market sentiment around the globe. June quarter GPD has also dented investor optimism after figures showed the Australian economy stayed stuck in the slow lane, as punishing borrowing costs and sticky inflation continue to squeeze consumers.

ABS data shows second quarter growth rose just 0.2% in the period, now unchanged for three straight quarters, and just under market forecasts of a 0.3% rise. Annually, growth slowed to 1%, lows last seen during the height of the COVID pandemic. 

Breaking down the details across the sectors, no surprise the tech sector locally is bearing the brunt of today’s sell-off, with stocks down as much as 2.5%, tracking a significant fall on Wall Street overnight. The sub-index however is up over 40% year to date, as of last close.

Elsewhere the miners have slumped, with the broader index nearing two-year lows as metal prices remain weak. Dalian iron ore futures and copper prices dropped overnight on continued fears of weakening demand from China.

The AXMM sub-index is down for a third straight session, and has tumbled nearly 20% this year, as of last close.

It’s a similar story for energy, as oil prices tank, with brent crude sliding to touch nine months lows after signs of a deal to resolve a dispute that has halted Libyan crude production and experts. The energy sub-index is down nearly 12% year to date, as of last close.

And the gold plays are also under pressure, as stocks sink to hit a two-week low after bullion hit a one-week trough overnight but has recovered in the Asian session to trade relatively flat. The gold sub-index is up 9% year to date, as of last close.

In the news

Getting to the corporate news of the day, Wesfarmers (ASX: WES) shares are under pressure as UBS thinks investors are still paying too much for the conglomerate’s hardware chain, Bunnings. ‘Sell’ rating retained, with a price target of AU$66 a share.

Australian listed shares of Hansen Technology (ASX:HSN) are on the rise, after Goldman Sachs upgraded the stock to ‘buy’ from ‘neutral’ citing improved earning visibility afters its acquisition of German software company Powercloud GmbH in February. Price target also getting a boost, to AU$5.10 per share, showing a 20% upside from its previous PT of AU$4.95.

Shares of Orora (ASX: ORA) are also on the move, soaring as much as 10% as the company says it will sell its North American packaging business to US-based Veritiv with an AU$1.78 billion price tag. Proceeds of the sale will be used to cut debt and fund further expansion of its facility in Queensland. The stock is down nearly 4% this year, as of last close.

Going global

On the global stage, Asian equities have tumbled, after a tech wreck on Wall Street overnight drive investors out of risky assets. Tokyo’s Nikkei 225 is leading the drop, at one stage down over 3%. MSCI’s broadest index of Asia-Pacific shares outside of Japan lost nearly 2% in early trade.

Historically, September is a bad month for stocks though analysts have pointed to a number of factors behind the falls. US futures are back online and are set to extend those overnight declines, with AI darling Nvidia (NASDAQ: NVDA) to remain in focus after it slid 10% as investors reigned in enthusiasm about artificial intelligence.

Rounding it out in the currency market, the Australian dollar is on the back foot as the sell-off on Wall Street hammers risk-sensitive currencies. The safe-haven yen is a stronger per dollar, as traders run for cover following the blood bath on Wall Street overnight. Sterling has edged down, while the euro is up. Investors are sitting somewhat on the sidelines ahead of Friday’s crucial non-farm payrolls report, which most market participants see as a significant factor in whether the FOMC cuts rates by 25 or 50 basis points at its September meeting.

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