It was a rough day on the ASX — the benchmark ASX 200 lost 1.84% for its biggest fall since July. All 11 sectors ended the session in the red and Materials led the losses, falling by almost 2.45%, followed by energy stocks and financials.
Weighting on the Materials sector is the iron ore price. Iron ore futures have fallen 21% this year, dropping almost 5% to $US110 per tonne Monday amid surging inventories and falling steel prices. This comes as China's economy disappointed amid ongoing weakness in its property market. BHP (ASX:BHP) dropped 2.66% and Fortescue (ASX:FMG) Metals fell 3.51%.
As for Financials, each of the major banks finished lower. CBA lost 2.68% after hitting a new record high on Friday. CBA CEO Matt Comyn said he was seeing “enormous” demand for bank shares, including from US pension funds and that shareholders valued performance, dividends and the predictability of earnings and that’s what the bank was focusing on.
Energy stocks suffered ahead of reports from OPEC and the IEA this week that may provide clues on the demand outlook for oil, while Brent futures are prices below $US82 a barrel after closing 1.1% lower on Friday and West Texas Intermediate was under $US78. Oil held that loss ahead of the latest US inflation report and reports from OPEC and the IEA this week that may provide clues on the demand outlook.
Investors are watching for a possible hotter-than-expected US inflation read on Tuesday. Woodside Energy today lost 2.42% and Santos fell 2.06%.
Woodside CEO Meg O’Neill defended the company, saying it pays its fair share of tax but added that resolving uncertainty around the future of the Petroleum Resources Rent Tax would at least provide much-needed certainty.
O’Neill said, "Nobody signs up to pay more tax. Our effective tax rate globally was 42%, so we pay our way. What is pleasing about where the Treasurer has come to and we appreciate the Coalition’s indicative signs of support for this, is that this will put to rest a review that began in 2016 and gives us the certainty that we need to make future investment decisions."
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