Australia’s ASX 200 closed in negative territory for the fifth straight trading session on Friday, with consumer discretionary and financial stocks among the biggest drags on the index. According to News, investors continued to react strongly to earnings reports, punishing companies that fell short of expectations.
Asx 200 and All Ordinaries Post Losses
The ASX 200 fell 26.6 points or 0.32%, closing at 8,296.20, marking a 20-day low. The All Ordinaries Index also declined, shedding 30.8 points or 0.36%, to finish at 8,570.90. Meanwhile, the Australian dollar weakened 0.17% to 63.90 US cents, reflecting broader market caution.
Sector Performance and Major Stock Movements
Six of the ASX 200’s eleven sectors closed in the red, with consumer discretionary stocks posting the largest losses of the session.
Among the most affected stocks, Wesfarmers fell 1.93% to $76.12, Star Entertainment Group dropped 3.57% to $0.135, and Lovisa Holdings declined 2.81% to $29.30, ahead of its upcoming earnings report on Monday.
The big four banks also extended their declines. Commonwealth Bank (CBA) lost 2.57%, closing at $151.73, while ANZ fell 1.43% to $28.79. NAB dipped slightly, down 0.085% to $35.08, and Westpac declined 0.60% to $31.03.
Reporting Season Volatility
Despite the continued market downturn, AMP chief economist Shane Oliver noted that more companies have exceeded earnings expectations than fallen short.
“While the reporting season started off strongly, results over the last week were softer, with disappointing bank results and falling earnings and dividend cuts for resource companies,” Dr Oliver said.
He pointed out that increased market sensitivity has led to heightened share price volatility, with individual stocks experiencing swings of more than 9% on average on their earnings release day.
Guzman Y Gomez Leads Biggest Market Declines
The worst-performing stock on Friday was Guzman y Gomez, which plunged 14.24% to $38.58. The Mexican food chain reported strong same-store sales growth in Australia, but issued a cautious outlook for its US operations, where sales fell 12.7% to $4.9 million.
Despite the positive performance in Australia, where same-store sales increased 9.4% to $573 million, the company struggled in other markets. Singapore sales rose 35.7% to $30.2 million, while Japanese sales increased 8.6% to $4.6 million.
However, the underlying EBITDA loss in the US widened 62% to $5 million. Co-chief executive Steven Marks attributed the Australian growth to the company’s delivery channel, marketing strategy, and demand for value menu items, including the $12 Chicken Mini Meal.
Other Major Stock Movements
Jumbo Interactive, a lottery operator, fell 8.78% to $11.95 after reporting lower earnings for the first half, citing a subdued jackpot environment.
Block Inc (Afterpay’s owner) also struggled, declining 5.87% to $124.08, despite reporting an 18% year-on-year increase in gross profit.
The company’s net revenue rose 4% to $6.032 billion USD, boosted by Cash App Bitcoin transactions.
Nine Entertainment and Domain Group Surge
While the broader market struggled, Nine Entertainment was the best-performing stock on the ASX 200, soaring 20.13% to $1.73. The surge followed reports that US online real estate firm CoStar is looking to acquire Domain Group for $2.65 billion.
Domain’s shares surged 40% to $4.37 following the announcement. However, competitors reacted negatively to the news, with REA Group losing 11.35% to $236.18, and News Corporation also declining.
