Unlike the tense stand-off on the Korean peninsula, Australian investors took a “shoot first, ask questions later” approach to heightened global anxieties, wiping around $20 billion off the market.
- A sharp retreat on Friday dragged the ASX down to a 0.7 per cent loss over the week.
- Gold was the only sector to gain as investors looked for a safe haven
- Quality blue chips offered little protection, with only the big supermarkets making gains
The local market followed the lead of Wall Street and Europe’s retreat from the escalating tensions between the US and North Korea with the ASX 200 and All Ordinaries both falling around 1.2 per cent.
Blue chips were particularly hard hit, the “Top 20” with only the consumer staples’ Wesfarmers and Woolworths making gains.
Banks, miners, property trusts and discretionary retailers also suffered.
Only the gold miners escaped the sell-off with the gold index rising more than 2 per cent. The sector’s heavyweight Newcrest was 2.1 per cent to $21.86.
The sentiment wasn’t helped by some weaker than expected results.
News Corporation’s locally listed shares tumbled 5.6 per cent after filing a full year loss of $817 million in the US as the traditional newspaper business continued to be a drag on the digital side of the business.
News Corp’s majority owned real estate portal was similarly crunched, down 5.7 per cent after unveiling a 19 per cent fall in profit on the back of a heavy write-down on the value of its recently acquired Asian business.
Asian markets weaker as commodities soften
Among the banks, the CBA fared the best despite ASIC chairman Greg Medcraft confirming his investigators would join the queue looking at the bank’s money laundering scandal.
The CBA fell 1 per cent to $80.22. NAB posted solid third quarter result but was still beaten down 1.3 per cent to $30.08.
The big miners were also down, although it was largely due to issues across the Yellow Sea from North Korea in the port city of Dalian.
Dalian iron ore futures fell 5.2 per cent in early trade, dragging the like of Rio Tinto (-2.6 per cent) and Fortesecue (-4.5 per cent) down.
The selling was spread across the region led by Hong Kong’s Hang Seng (-1.9 per cent) with Korea’s Kopsi (-1.6 per cent) and Shanghai (-1.4per cent) not far behind.
It all led to a loss of mojo for the Australian dollar, which slipped below 79 cents against the US dollar in afternoon trade.