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ASX Review: Negative Sentiment Continues to Drive Market Correction

ASX Review: Negative Sentiment Continues to Drive Market Correction
Jun 04, 2015 By Imran Valibhoy

The ASX was down 79.3pts, or 1.40 per cent, at 5504.3pts on Thursday. The negative sentiment among investors has continued to drive the market correction. “The ASX continues its sharp correction, falling for the fourth consecutive day,” said Wise-owl equity analyst Simon Herrmann. “The local market is on track for its worst week so far this year as investors continue to selloff ASX50 bluechip stocks.”

All sectors were down on Thursday, led by Utilities, which fell 2.47 per cent. Metals and Mining fell sharply as well, down 1.87 per cent. Australian shares were initially up and down in the opening minutes of trading, but fell sharply soon thereafter. Data released around 11:30am showed the trade deficit for April ballooned to its largest value since data collection began. However, the market was already down at this point and continued a downward trend starting at 1:00pm and continuing to the end of the day. The Australian dollar fell sharply on news of the deficit and is currently trading at US$0.7722 around 4:37pm AEST.

International markets were mostly up in the previous day of trading. In the US, the Dow Jones was up 0.36 per cent and the S&P 500 was up 0.21 per cent. In Europe, the DAX was up 0.32 per cent and the FTSE 100 was up 0.32 per cent. The Nikkei 225 has partially rebounded after ending its strong upward trend previously, rising 0.07 per cent near the end of trading hours. In China, the Hang Seng is down 1.02 per cent while the Shanghai Composite is down 2.01 per cent.

Superloop (ASX:SLC) was up $1.03, or 103 per cent, at $2.03 per share. Dark fibre and data company Superloop had a strong debut on the ASX on Thursday.

Ainsworth Game Technology (ASX:AGI) was down 21c, or 6.95 per cent, at $2.81 per share. Due to headwinds facing sales, the company has warned that profits for FY2015 will be on par with profits from the previous corresponding period.

Metcash (ASX:MTS) was down 24.5c, or 17.69 per cent, at $1.14 per share. Grocer Metcash warned investors that it would stop paying dividends after taking a $640m hit to profits.

Qube Holdings (ASX:QUB) was down 21c, or 7.58 per cent, at $2.56 per share. Qube released a statement on Thursday stating it was unlikely that trading conditions would improve in the next 12 months.

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Imran Valibhoy Author: Imran Valibhoy Jun 04, 2015

Since Joining the firm in 2006, Imran has worked on a range of M&A and Capital Market transactions in the natural resources, mining as well as projects in the renewable energy sector. Prior to joining Wise-owl, Imran worked at Euroz Securities in Perth, aiding in the advisory and valuation of companies in the mining and industrial sectors in Australia. Imran has a Masters in Banking & Finance from City University's Class Business School in London and a Bacheloor degree in Commerce from UWA.

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