The Australian sharemarket has fallen to a seven week low as oil prices weigh heavy on miners and industrial companies.
The bourse fell twice as far Monday as Friday night’s futures indicated, with energy the only one of 11 sectors in the green.
Materials and industrials were the big sliders, as the ASX200 fell to 8505.3 points, down 1.45 per cent.
A “full round trip in May” for the Aussie Dollar has given back almost US1.4 cents, while the All Ords also fell 1.52 per cent on Monday.
Pallet company Brambles was among two huge losers on the ASX200, as the company revealed it could not get enough workers to repair pallets up to standards for robotic handling.
Robots do not like splinters or bent pallets, and Brambles followed Cochlear, Commonwealth Bank and CSL as ASX blue chips to suffer major sell-offs in recent weeks.
Brambles’s price tumbled 20.2 per cent on an $84m revenue downgrade.
Telco owner Tuas fell 62.8 per cent after the Singapore government blocked an acquisition. On top of that, a Tuas subsidiary in Singapore might have illegally been using the wrong radio frequencies.
Agribusiness wholesaler Elders posted half-year results, with the company reiterating the hit high diesel prices will have; shares fell 22.9 per cent.
Elders face dry conditions and lower crop yields in northern NSW, but good wool and livestock prices and favourable weather in South Australia and Victoria will offset some of the losses.
And diesel prices show no signs of easing, as Brent crude pushed above US$110 a barrel and West Texas Intermediate rose above US$107.
Woodside gained 2.9 per cent, Santos rose 2.7 per cent, Beach Energy gained 2.7 per cent and Viva lifted 1.3 per cent.
Inversely, 36 of the 40 largest miners all lost at least 1.3 per cent. BHP lost 2.8 per cent, Northern Star shed almost 2.5 per cent, Fortescue fell 2.9 per cent and Rio Tinto lost 3.6 per cent.
Bond yield and inflation concerns hurt gold equities too, with Newmont sliding 4.2 per cent and Greatland Resources losing 5.9 per cent.
The only gainer in those 40 largest miners was Lynas Rare Earths (up 5.5 per cent), following federal Treasurer Jim Chalmers’ renewed orders for Chinese shareholders to divest from Northern Minerals.
Up 44 per cent over the past year, the ASX materials sector “is benefiting from a whole cluster of tailwinds”, Global X ETFs strategist Justin Lin said.
A low base out of the pandemic, US-led deglobalisation and demand for the minerals in computer chips are said tail winds.
“Smart money has clocked this trend for a while now. If we exclude the Iran war, materials have outperformed financials for nine months in a row, the strongest streak of relative outperformance in more than 20 years,” Mr Lin said.
“Due to the significant overweight position of financials within the domestic index, the road ahead for Australian equities could still prove challenging, even with materials acting as a ballast against weakening conditions in the local economy.”
The global tumult pushed the Aussie Dollar to a “full round trip” already in May, Westpac currency analysts say.
The AUD copped a “bruising” to end last week after “coasting” above US$0.72.
“The global bond sell‑off is now clearly bleeding into risk assets, and the Australian dollar heads into a busy week with plenty to digest,” the analysts say in a note.
