The Australian sharemarket closed lower after overseas markets pulled back, with the world on edge awaiting potential military chaos in eastern Europe.
The benchmark S&P/ASX200 index dropped 0.51 per cent to 7206.9, while the All Ordinaries Index fell 0.59 per cent to 7490.3.
CommSec analyst Steven Daghlian said trade had been cautious in recent days after a strong start to February, with the local bourse “running on the spot” due to the threat of Russia invading Ukraine.
“That’s somewhat overshadowing the dozens of profit results that we’re getting … because of the potential negative impact that type of conflict could have,” Mr Daghlian said.
“It could lead to the involvement of other nations; sanctions as well.”
IG market analyst Kyle Rodda agreed all eyes were on watch for war.
“Volatility has subsided somewhat today … but market participants are wary of an invasion at any moment, as brinkmanship and the stakes stay high,” Mr Rodda said.
“The uncertainty here has been layered upon the ongoing concerns for markets about the path forward for global monetary policy, as traders await US PPI (Producer Price Index) data tonight, with the gauge an insight into both the inflation outlook and the prospects for profit margins for US companies.”
Despite the tensions in Europe helping oil prices in their march towards $US100 a barrel, the local energy sector went from being the best performer on Monday to the worst on Tuesday.
“I think what we’re seeing here is a bit of profit taking because they’ve really been some of the best performers on our market since the start of this year,” Mr Daghlian said.
Beach Energy, which rocketed 9.43 per cent on Monday after posting strong first half results, tumbled 10.46 per cent to $1.45.
Santos also erased all of the prior day’s 4.04 per cent gain, dropping 4.15 per cent to $7.40, while Woodside fared less poorly, slipping 2.52 per cent to $26.74.
The gold price had risen for seven straight days and was near an eight-month high, Mr Daghlian said.
AngloGold Ashanti put on 3.89 per cent to $5.88, but Newcrest eased 0.25 per cent to $23.64.
“There’s been a bit of action in China today too, with regulators over there jawboning iron ore prices 10 per cent lower, which has weighed on the ASX’s materials sector today despite BHP’s solid results and record dividend,” Mr Rodda said.
BHP – the biggest company on the ASX – only edged 0.3 per cent higher to $48.18, despite smashing its dividend estimate by 21 per cent, OMG chief executive Ivan Tchourilov said.
“This announcement went alongside a strong performance above the estimated profit for the first half of FY22 due to the strength in iron ore prices,” he said.
Rio Tinto slid 2.33 per cent to $118.75 and Fortescue slumped 5.1 per cent to $21.59.
Metals recycler Sims Limited rocketed 13.68 per cent to $17.04 after booking a mammoth 622 per cent surge in first half net profit.
Chief executive Alistair Field said earnings beat guidance thanks to trading margin growth despite volatile freight markets and inflationary pressures.
Jobs website Seek rallied 6.08 per cent to $29.47, unveiling a 59 per cent jump in first half revenue.
“Businesses continued to rehire following Covid-related cuts, and in many cases restarted investment,” chief executive Ian Narev said.
“Whilst candidate activity on our sites remained high, application rates were weaker.”
Disposable gloves and condoms maker Ansell gave up 1.13 per cent to $25.47 after achieving what chief executive Neil Salmon described as “respectable” first half organic sales growth of 7.5 per cent.
“It fell 14 per cent on the 31st of January when it warned of lower profits for the year,” Mr Daghlian said.
“Its revenues increased, its profits on the other hand have fallen almost 30 per cent, partly because of the issues with some of its factories across South East Asia, which have had to be temporarily closed due to Covid.”
Seven West Media dropped 6.76 per cent to 69 cents.
“The slip comes as a bit of a surprise as the media business reported strong half-yearly results,” Mr Tchourilov said.
Crown Resorts dipped 0.32 per cent to $12.60 after S&P Global Ratings said Blackstone’s board-backed takeover offer could adversely affect the gaming group’s credit quality, depending on the US private equity giant’s financing strategy.
ANZ backtracked 1.42 per cent to $27.80, Commonwealth Bank gave up 0.55 per cent to $99.49, National Australia Bank inched one cent lower to $30.42 and Westpac shed 3.39 per cent to $23.07.
In economic news, the latest ANZ-Roy Morgan consumer confidence index rose 3.3 per cent last week, its biggest weekly gain since early April last year, with Queensland the most upbeat.
“The passing of the Omicron peak – along with the news that international borders will reopen to vaccinated tourists later this month – no doubt helped lift sentiment despite rising petrol prices,” ANZ head of Australian economics David Plank said.
The Aussie dollar was fetching 71.1 US cents, 52.52 British pence and 62.8 Euro cents in afternoon trade.
