The S&P/ASX200 closed lower today, dropping 35.60 points or 0.55% to 6,460.60 and setting a new 50-day low. Over the last five days, the index has lost 3.58% and 11.20% over the last 52 weeks.
The bottom performing stocks were Telix Pharmaceuticals and Core Lithium Ltd (ASX:CXO), down 14.47% and 5.88% respectively.
Telix was hit hard after having to withdraw its marketing authorisation application in Europe for its Illuccix product.
The company described the developments as an "unexpected and extremely disappointing result".
"In the late stages of review, the Danish Medicines Agency (DKMA), in consultation with other European regulatory authorities, has requested additional Chemistry, Manufacturing and Control (CMC) data," Telix told investors.
"These requests cannot be reasonably delivered within the prescribed review timeframe and therefore Telix has elected to withdraw the application."
Iluccix has been approved by other major global regulators, but this wasn’t enough for DKMA.
Telix said it had a track record of delivering imaging reliably and safely to tens of thousands of European prostate cancer patients.
"Ultimately, this is a poor outcome for patients."
"This is not the outcome we expected, despite our best efforts to meet all regulator information requests," managing director and chief executive Dr Christian Behrenbruch said.
"We are confident that the additional data can be provided but the prescribed timeframes of the review process mean that the most efficient process is to withdraw the application and then resubmit."
The financial impact is minimal as full commercial sales weren’t due until mid-2023.
Only two sectors were in the green today: Communication Services was 1.39% higher and Utilities gained 1.90%.
Stage 3 tax cuts to stay
Despite inflationary pressures, the Federal Government will deliver stage three tax cuts.
Treasurer Jim Chalmers said the cuts would not affect inflationary pressures.
“Even if we took some of the steps that people have been urging us to do on stage three tax cuts, that would not change the inflationary environment that we confront right now.
“I think the public conversation sometimes doesn’t quite understand that. Knocking off these tax cuts two years down the track wouldn’t have an impact on inflation in the interim.”
While Aussies can expect tax cuts, there will be no surplus in the coming budget.
“I think we need to be realistic about the fiscal situation,” Chalmers told reporters.
“I want to be upfront about that and one of the reasons why we’ve tried to be as upfront and honest and level with people throughout about the fiscal situation is we want people to understand these pressures that are on the budget.”
Chalmers said an economic rebound will take some time, with global conditions needing to settle.
“The global economy is eroding and there are real fears for a number of the major economies and our major trading partners.”
Retail sales rise
Retail sales figures were released today, showing a rise of 0.6% in August and the impact of rate rises on shoppers.
The good news was the figure beat consensus estimates of a 0.4% rise, compared to the 1.3% jump in July.
Food retailing rose 1.1% in August and spending on household goods was up 2.6%.
Spending on clothing, footwear and personal accessories fell 2.3%, however, department store sales rose 2.8%.
Spending at cafes, restaurants and on takeaway food services also rose 1.3%.
According to CreditorWatch chief economist Anneke Thompson, “Today’s retail trade results indicate that consumers are still willingly spending money in cafes and restaurants, as well as department stores.
"However, there was some downward movement in discretionary spend categories, with clothing, footwear and personal accessory as well as other retailing recording falls in turnover month to month. This may indicate that consumers are starting to watch their spending in some areas now that interest rises are starting to be felt in bank accounts.
“Retail Trade over the upcoming summer holiday and Christmas period will be a very interesting data set to watch.
"For the RBA, this will give them some insight in to whether their attempts to cool the economy are working. If consumer behaviour does start to better reflect very negative consumer sentiment, then business sentiment is likely to start falling as well.
"For the business community, this means we are likely to start seeing more delayed or late payment activity, as businesses try to hold on to cash as long as possible.”
No risk to financial system
The Treasurer had a lot to say today.
On the Optus cyber attack, which saw 10 million Australians thieved of their personal data, he said there was no risk to Australia's financial system.
A number of considerations will now have to be worked through to prevent similar attacks including “enhanced monitoring” of customers, including privacy.
“What we want to do is make sure if there is more that can be done by financial providers to protect customers, that should be done,” Chalmers says.
A focus will be the safe and secure sharing of data between Optus and regulated financial institutions.
“Obviously financial institutions can play a really important role here. Using that data if we can work out the best way to get it to them to protect their customers who are at the greatest risk of what’s going on here.
“Now, the reason that we are in these conversations in an ongoing way is because there are a number of considerations to work through.”
The Federal Government is working with Optus and financial institutions to protect customers without breaching privacy rules.
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