Market wrap: ASX falls on May 30 trading day

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The Australian stock market fell for the third day in a row on Thursday, triggered by a wave of selling on Wall Street, inflation fears and the crash of BHP shares.

The benchmark ASX 200 index fell 37.4 points or 0.49 percent to 7628.2, while the broader All Ordinaries index fell 39.8 points or 0.5 percent to 7895.9.

Technology stocks performed better, rising 12.9 points or 0.43 percent to 3049.4.

The decline followed a negative session on Wall Street overnight, with the Dow Jones falling 411 points, or 1.06 percent, to 38,441 and the S&P 500 index down 0.74 percent to 5,266.

The technology-heavy Nasdaq index fell 0.58 percent to 16,920.

The sell-off was driven by weak demand for U.S. bonds, coupled with growing fears that the Federal Reserve may keep interest rates high for longer to curb ongoing inflation.

“The trigger was a government bond auction in the US,” said Kyle Rodda, senior financial markets analyst at Capital.com.

“Demand was rather weak, fuelling fears in the market that have been lingering for almost two years about how the US will finance its rather large deficit.

“The concern is that there may not be demand for US Treasuries at current levels and therefore yields will need to rise to adequately compensate investors for the risks they are willing to take.”

“We’ve seen this really broad-based decline in equity prices and it’s going to feed into the inflation data tomorrow night, which is pretty significant because we’ve seen markets again price out the prospect of interest rate cuts in the U.S. this year because of this kind of fear of stubborn inflation.”

On the local stock exchange, six out of eleven industrial sectors closed in the red, led by the raw materials sector with a sharp decline of 1.86 percent.

Diversification giant BHP drove the decline with a 1.73 percent drop to $44.30 a share after announcing it had withdrawn its $74 billion offer for rival Anglo American.

In a statement to the ASX, CEO Mike Henry said the large Australian would continue to take a “disciplined approach” to mergers and acquisitions.

The fall in the price of iron ore to $115 per tonne also hit the major mining companies: Rio Tinto lost 1.54 percent to $127.66 and Fortescue fell by more than three percent to $24.78.

Coal stocks also saw a sharp decline, led by Whitehaven Coal, which fell 2.12 percent to $7.85.

Coronado Global Resources fell 3.59 percent to $1.08 and Stanmore Resources lost 1.58 percent to $3.11, while smallcap Terracom Resources fell 6.67 percent to 21 cents.

The energy sector fell 1.4 percent on concerns that rising yields in the U.S. would slow economic growth and reduce oil demand, said Tony Sycamore, analyst at IG Markets.

Woodside Energy fell 1.16 percent to $27.15, Santos fell 1.83 percent to $7.49 and Beach Energy slipped 0.59 percent to $1.68.

The big banks

In corporate news, sports company Catapult Group’s stock rose nearly 10 percent to $1.70 after it reported a 20 percent increase in revenue to $100 million.

Beef producers had a mixed day after news broke that China would lift its ban on Australian beef imports.

Australian Agricultural Company rose 2.84 percent to $1.45, while Elders fell 0.61 percent to close at $8.15 after rising in morning trade.

The biggest gainer in the ASX200 was Pro Medicus, up 3.6 percent to $120.07 per share. The biggest laggard was Regis Resources, down 6.51 percent to $1.79.

The dollar lost 0.16 percent against the greenback and closed at 66.6 US cents.

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