That's it for the ABC business blog on Monday July 21.
We'll see you bright and early tomorrow.
That's it for the ABC business blog on Monday July 21.
We'll see you bright and early tomorrow.
It was a negative start to the week on the local share market after record highs on Friday.
The ASX 200 closed 1% lower at 8,668 points. The benchmark index suffered its largest falls since US President Donald Trump's so-called Liberation Day tariff announcement in April.
Insignia Financial's share price fell 6.2% after extending takeover talks with CC Capital.
Afterpay owner Block had the biggest gains on news the US-company would list on the S&P500 on Wall Street.
Banks were the biggest drags on the ASX 200, with the sector down 2.5%. Overall, 9 of 11 sectors on the index closed lower.
As for the 'big four' banks, CBA lost 2.5%.
Westpac fell 3.6%.
ANZ dropped 2.5%, while NAB lost 2.4%.
The ASX 200 closed lower on Monday, dropping 89 points or 1% to 8,668.
More to come
Vale to dear Peter Ryan. A friend and mentor to many here at the ABC who has died at the age of 64.
You can read more about the life and career of Peter in this lovely tribute written by the ABC's Nick Grimm:
Australia’s capital city auction market remains resilient, according to Cotality, with 1,574 homes taken to auction last week, up 9.9% from the week prior, though still 11.4% below the same time last year.
The preliminary clearance rate rose to 74.4%, the second highest this year and the sixth consecutive week above 70%.
Melbourne led the nation with 678 auctions and a preliminary clearance rate of 76.7% — its strongest result since May 2023. Sydney followed with 587 auctions, returning a slightly softer 74.8% clearance, down from 76.2% the previous week.
Among the smaller capitals, Brisbane hosted 155 auctions with 68.4% clearing, while Adelaide recorded 90 auctions and a 71.7% clearance rate. The ACT held 55 auctions, with a preliminary clearance of 65.8%.
Auction activity was minimal in Perth and Hobart, with just six and three auctions respectively. Of those reported, two homes sold in Perth and one in Hobart.
This week, around 1,710 capital city homes are scheduled to go under the hammer, as strong clearance rates continue to buoy seller confidence across the country.
China kept benchmark lending rates unchanged on Monday, as forecast, after it reported slightly better-than-expected second-quarter economic data.
Why it's important
Signs of economic resilience effectively reduced any urgency for further stimulus, while analysts widely expect persistent weak domestic demand warrants some monetary easing later this year.
By the numbers
The one-year loan prime rate (LPR) was kept at 3.0%, while the five-year LPR was unchanged at 3.5%.
In a Reuters survey of 20 market participants conducted last week, all participants predicted no change to either of the two rates.
Most new and outstanding loans in China are based on the one-year LPR, while the five-year rate influences the pricing of mortgages.
Context
China's economy slowed less than expected in the second quarter in a show of resilience against US tariffs, though analysts warn weak demand at home and rising global trade risks would ramp up pressure on Beijing to roll out more stimulus.
Meanwhile, persistent deflationary pressure also calls for further monetary easing measures. China's producer deflation deepened to its worst in almost two years in June as the economy grappled with uncertainty over a global trade war and subdued demand at home.
A lot of market attention will be shifted to the politburo meeting later this month, which is likely to shape economic policy for the rest of the year.
- with reporting by Reuters
Iron ore futures prices rose on Monday, supported by hopes for more stimulus in China to aid growth momentum following a mixed bag of second-quarter economic data, and steel export demand.
The most-traded September iron ore contract on China's Dalian Commodity Exchange was 2.15% higher at 809.5 yuan ($US112.78) a metric tonne, as of 0250 GMT.
The benchmark August iron ore on the Singapore Exchange was 2.81% higher at $US103.6 a tonne.
China left its benchmark lending rates unchanged, in line with expectations after slightly better-than-expected second-quarter economic data.
Market focus is now on this month's Politburo meeting, which is likely to shape economic policy for the rest of the year, traders and analysts said.
Growing expectations of macroeconomic policy stimulus drove prices of major steel products higher, Mysteel Global said in a note.
Improved margins on steel sales also prompted steel mills to increase their blast furnace operations, with the average blast furnace capacity utilisation rate rising by 0.99 percentage points week-on-week during July 11-17, Mysteel said in a separate note.
According to analysts, hot metal output, an indicator of iron ore demand, remained high.
Steel exports remained high overall, broker Everbright Futures said in a note.
Elsewhere, iron-ore shipments from top producers Australia and Brazil have increased slightly, said broker Hexun Futures.
- with reporting from Reuters
Prices current around 4:37pm AEST.
Live updates on the major ASX indices:
Why is the ASX falling so sharply today? Many of you have wondering exactly that, so we asked IG's market analyst Tony Sycamore for his thoughts.
As Sycamore notes, the local share market has started the new week on the back foot, with the ASX 200 falling more than 100 points and giving back much of Friday’s 118-point (1.37%) gain, which had powered the local bourse to a fresh record high.
"Today’s sharp fall, is the largest since the Liberation Day sell-off in early April and is almost twice the size ASX futures predicted when they closed 49 points lower on Saturday morning.
"The decline is being led by heavy falls in the big banks, which have dragged the ASX200 Financial sector 2.25% lower. Other interest rate-sensitive sectors, including Consumer Discretionary (-1.39%) and Real Estate (-1.24%), are also feeling the pressure.
"Only the Materials and Energy sectors are trading higher, and they will need to remain resilient for the remainder of the day if the ASX200 is to close above the 8640/20 level it broke higher from last week.
"In the absence of any fresh news, today’s pullback is possibly related to profit taking ahead of the August earnings season which will likely highlight stretched valuations with certain sectors, particularly the banks.
"The ASX200 is trading at a P/E ratio of 28.3 times, significantly higher than its 3-year average of 22.8 times."
Thanks to Tony for providing the above analysis.
At 2.13pm AEST, the ASX 200 was down 1.13% to 8,658 points.
Afterpay owner Block rose 11.7% to $122.59, its highest level since February 21.
The stock's jump comes on news Block will be added to the S&P 500 Index on Wall Street from Wednesday, after Chevron Corporation bought up acquisition Hess Corp.