Australian stocks were beaten on Friday, ending the first trading day in October down 2%.
The ASX200 ended the day at 7,815.5, bringing the total losses for the week to 2.1%.
Global economic uncertainties weighed heavily on the stock market throughout the week and Wall Street set the tone on Thursday evening, September proving the worst month for stocks in the United States since the start of the COVID-19 pandemic .
Congress succeeded in passing a bill to prevent a government shutdown in the United States on Friday morning Australian time, but the House postponed a planned vote on a $ 1,000 billion infrastructure bill.
Australian stocks opened lower and fell 2.3% in the early afternoon as S&P 500 futures fell.
Banks and mining stocks bled heavily throughout the day, with Commonwealth Bank leading losses down 4.1% to $ 100.08. Its other four big banking peers also ended the day with losses of more than 2% each, while BHP lost 2% for the session, dismissing any optimism about the stabilization of the price of iron ore.
Blue-chip stocks slipped across the board, with biotech giant CSL also providing significant weight with a 1.5% drop to $ 288.87.
The bearish sentiment came against the backdrop of a major day of domestic political news, including the resignation of New South Wales Premier Gladys Berejiklian and the announcement that Australia would reopen its international borders to from November.
Investors and analysts have been following developments in bond yields closely throughout the week, noting that rising yields will put pressure on valuations. The Australian 10-year yield stood at 1.49% on Friday morning.
“Fluctuations in bond yields are putting pressure on valuations. This, combined with a clear earnings rollover for our market and some risks associated with the AGM updates, also keeps us cautious about the direction of the index, ”said Chris Nicol, analyst at Morgan Stanley, in a note.
“A drop below level 7000 would not surprise us.”
Gold stocks proved to be the most resilient part of the market for Friday’s session as investors sought refuge from uncertainties. Northern Star Resources gained 2.5% to $ 8.71, while Evolution Mining was up 2.3% to $ 3.57.
Travel stocks have also received a small boost thanks to the announcement of the plan to reopen the country. Webjet gained 2% to $ 6.47, Qantas ended the day up 0.7% to $ 5.71 and Helloworld Travel stood out up 5.5% to $ 2.70.
Despite a difficult week, the ASX200 still managed to post gains of 2% for the September quarter. Sherifa Issifu, S&P Global partner in index investment strategy, noted that all sectors ended the quarter in better health, except mining stocks.
Large-cap stocks also ended narrowly in the red for the three months ending in September. “The S & P / ASX Emerging Companies micro-cap was the only Australian size range to top this month, up 8% to end the quarter with a gain of 19%,” S&P said in its update. quarterly index day.