Australian sharemarket ends week on bum note but up for the tenth straight month

The Australian sharemarket backtracked on the last trading day of the month, mainly due to an iron ore major, which alone shaved more than 13 points off the benchmark S&P/ASX200 index.

The index closed 0.33 per cent lower at 7392.6 after a choppy session, while the All Ordinaries Index dipped 0.4 per cent to 7664.2.

While it was a negative end to the week, CommSec market analyst James Tao said the S&P/ASX200 had gained more than one per cent in July, the tenth straight month of improvements.

That’s the longest winning streak since the 2007 mining boom.

So far this calendar year, the ASX has risen more than 12 per cent.

Fortescue was the biggest weight on the local bourse, slumping 5.29 per cent to $24.91 after Goldman Sachs issued a “sell” recommendation for the iron ore miner, pointing to higher than expected capital expenditure this financial year, outlined in yesterday’s June quarter production report.

Goldman Sachs was also critical of uncertainties around its Fortescue Future Industries renewables diversification, “with very little disclosure on projects and the benefits” and is concerned about execution and ramp-up risks on the Iron Bridge project, which has already had cost blowouts.

Australian sharemarket ends week on bum note but up for the tenth straight month

Camera IconFortescue was a major drag on the market, but had a good month overall, with its share price hitting record highs along with BHP and Rio Tinto. Credit: Supplied

It followed a more than 3 per cent tumble in the iron ore price yesterday.

OMG chief executive Ivan Tchourilov noted Fortescue had gained more than 10 per cent for the month, when the overall materials index rose by more than 7 per cent.

“Our traders were happy to take profits, as it topped our most-sold stocks for July,” he said.

BHP appreciated 0.3 per cent to $53.49 while Rio Tinto declined 0.56 per cent to $133.42.

Tech stocks were also among the losers, with Afterpay dropping 5.28 per cent to $96.66, fellow buy-now-pay-later provider Zip shedding 4.32 per cent to $6.64 and logistics software provider Wisetech Global retreating 2.29 per cent to $30.79.

In the energy sector, Origin plunged 7.85 per cent to $4.11 after slashing $1.57bn from the book value of its business, saying there had been a significant reduction in wholesale electricity prices and a contraction in near-term gas earnings, due to higher procurement costs and subdued business customer demand.

It also expects a $669m tax expense relating to its Australia Pacific LNG project in Queensland.

Origin also flagged lower underlying earnings for the 2022 financial year, warning that considerable uncertainty in economic conditions and increased volatility in commodity markets continued.

Macquarie Research described the update as “ugly”.

“This is at least the third downgrade this year,” it said.

Australian sharemarket ends week on bum note but up for the tenth straight month

Camera IconOrigin Energy said increased volatility in commodity markets continued. Tim Jones Credit: News Regional Media

Moody’s Investors Service said Origin’s deteriorating energy markets guidance was credit negative.

Mr Tchourilov noted lithium producers Galaxy Resources and Orocobre tracked higher, rising 3.56 per cent to $4.66 and 3.38 per cent to $8.25, respectively.

“Increasing commitment to accelerate the development of a lithium battery supply chain, paired with positive quarterly reporting from electric vehicle manufacturers (notably Tesla), has seen analysts upgrading the lithium demand forecast,” Mr Tchourilov said.

Shares in Pilbara Minerals, which jumped more than 30 cents this week, remained suspended pending a court application regarding the late filing of documentation relating to the issue of shares, which the lithium miner blamed on an administrative oversight.

Mr Tchourilov noted Western Areas, which mines nickel – also used in EV batteries – also bumped higher on the back of positive 2022 financial year guidance.

Western Areas shares appreciated 3.97 per cent to $2.62.

Ampol announced it had entered into a funding deal with the Australian Renewable Energy Agency to deliver a fast-charging network for EVs, spanning more than 100 sites covering the Greater Sydney, Melbourne, Brisbane and Perth regions, as well as Newcastle, Wollongong, Central Coast, Gold Coast, Sunshine Coast and Geelong.

Shares in Ampol dipped 0.8 per cent to $28.25.

Retailer Mosaic Brands, which owns fashion chains including Katies, Rockmans and Rivers, reported a full-year record net margin, online sales growth and slashed debt.

However, it withdrew its fiscal 2022 guidance, which had previously been provided subject to no further lockdowns.

Mosaic shares leapt 8.33 per cent to 52 cents.

The Federal Court ruled against Qantas over the outsourcing of about 2000 ground staff last year after the Transport Workers Union alleged the national carrier took advantage of the Covid-19 pandemic to get rid of the largely unionised group.

The airline said that had not been proved and it would appeal the decision, saying the union’s call to reinstate the jobs gave the ex-staff “false hope” as it would fight any court orders to that effect.

Qantas shed 0.65 per cent to $4.59.

Mr Tchourilov said Flight Centre was among the top five most bought stocks by his company’s clients this month, with investors appearing bullish on an economic recovery.

Flight Centre shares added 3.08 per cent to $15.05.

Marley Spoon plummeted 21.5 per cent to $2.19 after releasing a report after the ASX closed on Thursday, showing labour shortages and unprecedented weather disruptions had hit its US business, but the Berlin-headquartered meal kit delivery service maintained its full-year net revenue guidance.

ANZ was four cents softer at $27.71, Commonwealth Bank gained 0.2 per cent to $99.65, National Australia Bank put on 0.62 per cent to $25.93 and Westpac was unchanged at $24.52.

The Aussie dollar was buying 73.79 US cents, 52.89 British pence and 62.08 Euro cents in afternoon trade.

Australian sharemarket ends week on bum note but up for the tenth straight month

Camera IconThis week's movers and shakers, provided to NCA NewsWire by OMG. Credit: NCA NewsWire

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