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FIVE at FIVE AU: ASX down as energy stocks take a hit

Published 29/08/2024, 04:03 pm
© Reuters.  FIVE at FIVE AU: ASX down as energy stocks take a hit
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The ASX followed Wall Street’s lead lower today, closing down 0.32%.

Energy stocks were the worst performers as the sector lost more than 2%. Karoon Energy fell by 7.94% while Beach Energy (ASX:BPT) lost 4.51%, Paladin was down 3.46%, Santos dropped 2.9% and Whitehaven Coal (ASX:WHC) lost 2%.

After news it was cutting its final dividend (for the first time in a decade), Mineral Resources fell to its lowest level since 2021 and ended the day down 7.6% to $40.81.

MinRes ended the financial year with net debt of almost $4.43 billion and says expansion projects have been put on hold to focus on cutting costs.

Commonwealth Bank of Australia (ASX:CBA) CEO Matt Comyn has reaffirmed the bank's commitment to achieving net zero by 2050 while defending its lending practices to the gas industry.

Addressing the House of Representatives Economics Committee today, Comyn emphasised that the bank was "not anti-gas" and remained open to financing the industry. He did make it clear, however, that the CBA's support for the gas sector is contingent upon companies demonstrating plans to reduce carbon emissions.

Similarly, Woolworths has updated its sustainability and deforestation initiatives, moving to reduce the environmental impact of its primary deforestation-linked commodities like fresh beef, palm oil, paper and pulp, soy and cocoa products.

The new sustainability framework better aligns Woolworths with the international UN standard of the Science Based Targets initiative (SBTi) and specifically the Forest, Land and Agriculture (FLAG) Guidance.

Woolworths aims to achieve no-deforestation across its deforestation-linked commodities, including fresh beef, by December 31, 2025.

Aldi and Woolworths have now made commitments to sourcing beef that does not contribute to deforestation, yet Coles has made no such assertions.

Consumers to thank for slowdown

Westpac CEO Peter King says consumers are significantly contributing to the current economic slowdown. Addressing the House of Representatives Economics Committee on Thursday, King said, “The consumer is doing the heavy lifting in terms of the slowdown in the economy.”

King highlighted a noticeable stagnation in spending, noting that “activity on credit cards, debit cards has gone flat” and that per capita spending on credit cards had decreased. This, he indicated, was a key factor in the broader economic deceleration.

He described the economy as operating at “two speeds,” where individuals with mortgages face greater financial strain compared to those with savings who are faring better. King identified first-home buyers, particularly those with high loan-to-valuation ratios, as the most likely to require assistance.

King also discussed the competitive landscape in the mortgage industry, citing increased activity from Macquarie Group and the growing role of mortgage brokers, who now facilitate three-quarters of new mortgages.

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