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Russia’s decision to recognise two Ukrainian separatist regions as republics destabilised markets on Monday, sending equities lower but gold and oil prices higher. The ASX saw a broad sell-off among all sectors, apart from companies reporting strong results, gold miners and oil producers.
The benchmark S&P/ASX 200 closed 1 per cent lower, down 72.3 points, at a two-week low of 7161.3 points as US futures pointed to declines of as much as 2.4 per cent during the local session. European markets delivered a weak lead for Asian markets, which were all deep in red by Tuesday afternoon.
At the end of the session, 162 out of the ASX200 companies were lower as local and international traders took risk off the table ahead of potential sanctions against Russia.
Cochlear was one of the few stocks to defy the gloom after strong interim results. Credit:Edwina Pickles
“It’s because the geopolitical tension seems to be escalating and at the same time the US market was closed last night and so traders looked to the US futures, and they are down a lot,” portfolio manager at Tribeca Investment Partners, Jun Bei Liu, said.
“There is a lot of panic and profit taking ahead of what might be a very weak day for the US market.”
In the midst of the half-year reporting season, Cochlear jumped 9 per cent to a six-week high of $207.37, Costa Group improved by 8.7 per cent, and Coles Group increased 3.2 per cent despite reporting lower profits thanks to higher operating costs during COVID-19.
HUB24 gained 4.8 per cent on strong results, while Endeavour and Lendlease enjoyed a second session of gains.
Oil producers also improved as crude prices reached new seven-year highs amid fears sanctions would be imposed on the Russian oil market. Santos, Woodside Petroleum, and Beach Energy all improved, but Paladin Energy and Whitehaven declined.
While major miners BHP, Rio Tinto, and South32 all declined, gold miners got a boost from a spike in the precious metal above $US1,900 per ounce.
The big banks dragged on the index with Commonwealth Bank dropping 2.1 per cent and National Australia Bank falling 1.6 per cent. Wesfarmers dropped 3.7 per cent to close at a 15-month low of $48.40.
Among the big declines was a 13.1 per cent drop in Nanosonics after reporting a sharp drop in profits, and transaction firm Tyro Payments dropped to a nearly-two-year low of $1.45 well below its 2019 float price of $2.75.