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Lithium miner Allkem moved in the opposite direction of Liontown, losing 4.4 per cent. Market operator ASX (down 3.1 per cent) and South32 (down 3.5 per cent) were also among the biggest large-cap decliners.
Energy companies (down 1.5 per cent) were also weaker as coal miner Whitehaven (down 3 per cent) dropped along with Woodside (down 1.5 per cent) and Santos (down 1.8 per cent).
The lowdown
IG Australia market analyst Tony Sycamore said it was a “return to the days of mid-August” for the Australian sharemarket on Thursday with miners drowning in a sea of red.
“The ASX 200 felt the heat from higher bond yields and a weak lead from Wall Street, following a hotter-than-expected ISM services purchasing managers index that contained worrying signs of pricing and employment pressures,” he said.
Sycamore said NSW Treasurer Daniel Mookhey’s announcement on Wednesday that coal royalties would rise by 2.6 per cent from July 2024 weighed on coal miners including Whitehaven, New Hope and Yancoal.
Meanwhile, the rise in US yields weighed on the gold price, leaving gold miners weaker, Sycamore said.
He said lithium player Liontown Resources bucked the trend on speculation that a party was building a blocking stake to prevent Albemarle’s takeover from going through.
Elsewhere, US stocks fell again, extending Wall Street’s weak stretch this holiday-shortened week.
The S&P 500 dropped 0.7 per cent. After two days of trading, the benchmark index has lost nearly half of its gains from last week. The Dow Jones fell 0.6 per cent and the Nasdaq composite ended 1.1 per cent lower.
Big technology stocks were among the biggest drags on the market. Apple fell 3.6 per cent and Nvidia dropped 3.1 per cent.
The dominant economic theme continues to be inflation and interest rates, which the US Federal Reserve has boosted in an effort to bring down prices. Investors are hoping that the Fed might moderate interest rate increases going forward as inflation has been easing for months.
The Fed’s aggressive rate hikes started in 2022 and brought its main interest rate to the highest level since 2001. The policy raised concerns that the central bank might be too aggressive and hit the brakes on economic growth with enough force that the economy would be thrown into a recession.
A strong jobs market and consumer spending have propped up the broader economy and staved off a recession, so far. Wall Street will get several more economic updates on inflation and retail sales later in September ahead of the Fed’s next meeting.
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“The issues with respect to slots at Sydney Airport need to be addressed urgently to ensure fewer cancellations and delays for passengers, and to drive more competition,” said Sydney Airport boss Geoff Culbert as the federal government released its green paper on Australian aviation on Thursday.