AU Evening Wrap: ASX Slides as Commodity Stocks Weigh on Index; Fortescue Slumps 10%
Market Performance
Australia's $S&P/ASX 200(.XJO.AU$ closed 0.5% lower at 7953.2, trimming its week-opening gains ahead of the release of key inflation data on Wednesday. Nine out of eleven sectors ended in the red as traders anticipated June-quarter CPI data, which economists view as crucial for determining the future path of local interest rates. Higher-than-expected inflation could prompt the country's central bank to raise the cash rate again before considering cuts.
The materials sector led the losses, with $Fortescue Ltd(FMG.AU$ falling 10% following local media reports that an institutional investor was reducing exposure through a block trade. Rival iron-ore miners $BHP Group Ltd(BHP.AU$ and $Rio Tinto Ltd(RIO.AU$ also declined, losing 1.0% and 1.3%, respectively. The financial sector edged 0.2% higher, with major banks showing mixed results. $CommBank(CBA.AU$, the largest company by market capitalization, rose 0.8% to reach a new record.
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Fortescue Slumps as Capital Group Sells $1.2 Billion Stake
Fortescue shares plummeted after Capital Group Cos. sold a A$1.9 billion ($1.2 billion) stake in the iron ore miner, with the shares priced at nearly a 9% discount to Monday's closing price. Capital Group conducted the sale through JPMorgan Chase & Co. bankers on Monday night. The shares in the block trade were priced at A$18.55 each, causing the stock to drop as much as 9.2% on Tuesday, reaching its lowest level since November 2022.
This selloff comes after Fortescue, founded by billionaire chairman Andrew Forrest, announced earlier this month that it was scaling back its plans to transition into a green hydrogen heavyweight due to high energy prices, leading to an overhaul of the company and 700 job cuts. The block trade, offered at a variable price range of A$18.55 to A$19.10 per share, represented about 100 million shares, or approximately 3.2% of the total securities on issue.
Credit Corp Soars on Upbeat FY25 Forecast
$Credit Corp Group Ltd(CCP.AU$ shares rallied 14 per cent to $17.32 and was the best performing stock on the ASX 200 after its guidance came in within analyst expectations. The debt collecting giant recorded an 11 per cent drop to its underlying net profit after tax (pre-impairment) at $81.2 million for fiscal year 2024.
Source: Dow Jones Newswires, AFR, ASX
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