The S&P/ASX 200 (ASX: XJO) fell another 1.5% on Tuesday as a spike in bond yields in the US and a lack of clarity on the US debt ceiling put markets into a tailspin.
Every sector was lower with healthcare the hardest hit, dragging down over 3% on the back of a 3.8% fall in CSL Limited (ASX: CSL) despite the lack of any announcement. This suggests it may be portfolio rebalancing ahead of the end of the quarter.
ASX materials were similarly weak, with Fortescue Metals Group Limited (ASX: FMG) falling 5.6% even though the iron ore price gained strongly.
Energy boom
The highlight by far was the energy sector with Brent crude hitting US$80 per barrel making it the only gainer, up 4.3%.
The sustained rally comes amid an impending energy shortage with many countries now seeking to hoard their own resources.
The biggest beneficiary of the rally was Beach Energy Ltd (ASX: BPT) which gained over 10%, along with Woodside Petroleum Limited (ASX: WPL) and Santos Ltd (ASX: STO), which both hit multi-year highs.
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Retail sales hit by lockdowns
In an extremely predictable event, retail trade fell 1.7% in August, the third consecutive decline.
NSW and Victoria were the biggest detractors with extended lockdowns sending spending over 3% lower with little hope of a short-term rebound.
Temple & Webster Group Ltd (ASX: TPW) and Redbubble Ltd (ASX: RBL) both fell over 3%.
Origin’s big profit
Origin Energy Ltd (ASX: ORG) announced that its initial $134 million investment in one of the world’s leading energy retailers, Octopus Energy, had tripled in value in less than 12 months.
This comes as Generation Investment takes a 7% stake in Octopus that values the company at £3 billion. The Origin share price finished 5.2% higher on the news.
WAM bids for PM Capital
Geoff Wilson’s WAM Capital Limited (ASX: WAM) has continued its acquisitive ways, making a takeover offer for the PM Capital Asian Opportunities Fund (ASX: PAF) listed investment company (LIC).
The $50 million fund was in the process of merging with PM Capital’s other LIC with the deal offering one WAM share for every 1.99 PAF shares; the LIC finished 4.3% higher and in line with its NTA.
ASX 200 today
The ASX 200 is set for another red day as all three US benchmarks tumbled lower overnight. The tech-heavy Nasdaq fared the worst, ending the session down 2.8%. To find out more, check out my US stock market report.
