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ASX 200 set to fall – FMG, BLD & BSL shares in focus

The domestic market was buoyed by a jump in the iron ore price as Chinese lockdowns continue to ease, with the S&P/ASX 200 (ASX: XJO) gaining 1% on Wednesday on the back of a 2.5% jump in the materials sector.

Only the staples sector finished lower, falling 1% behind a 1.1% drop in Woolworths Group Ltd (ASX: WOW).

Champion Iron Ltd (ASX: CIA) and BHP Group Ltd (ASX: BHP) were among the leaders, up 5.3% and 3.2%, as was Fortescue Metals Group Limited (ASX: FMG) after it was announced that Twiggy Forrest would re-join the firm as Executive Chairman with the CEO of both the traditional mining business and Fortescue Future Industries reporting directly to him.

Boral downgrades

Boral Limited (ASX: BLD) was among the biggest detractors, falling 3.1% after management flagged a $45 million hit to earnings due to the massive impact of exceptional rainfall on both volumes and delivery costs in Australia.

$15 million was attributed to the impact of higher energy costs and comes on the back of a prior downgrade amid COVID impacted operating conditions.

Barrenjoey value jumps

Shares in Magellan Financial Group Ltd (ASX: MFG) gained more than 3% after news emerged that its investment in start up investment bank Barrenjoey had nearly doubled in value to $750 million.

The result came after co-investor Barclays Bank confirmed it had invested a further $75 million into the fast-growing company, sending Magellan’s stake down to 36%.

BlueScope upgrades

Market share gains continue to support BlueScope Steel Limited (ASX: BSL) which upgraded earnings guidance by close to 10%, now expecting $1.475 billion, driven by a continued recovery in the North American steel operations.

This was offsetting weakness in Australian products which have been hit by supply chain issues throughout Asia. Once again, stronger steel spreads have benefited from their ability to pass on costs to consumers.

Wage growth underwhelms

Australian wage growth underwhelmed, rising just 0.7% in the March quarter for an annual rate of 2.4. This was below expectations of 0.8% and 2.5% but gives the RBA plenty of scope for further rate hikes.

Eagers Automotive share price driven lower

Eagers Automotive Ltd (ASX: APE) shares fell 3.3% after warning that a shortage of new vehicles, driven by the lack of semiconductors, was crimping the ability to sell new cars, hitting margins and revenue.

ASX 200 today

Looking ahead, the ASX 200 is set to tumble when the market opens this morning, following a heavy sell-off on US markets overnight.

All three benchmarks suffered their worst falls since 2020 as stagflation fears rise. To find out more, check out my US stock market report.

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