ASX Slides to Edge of Correction Territory

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Welcome to Equity Espresso’s Market Recap.

The Australian share market suffered another wipeout on Wednesday, with the S&P/ASX 200 Index falling another 1.32% (103.9 points) to 7,786.20 as 10 of 11 sectors closed in negative territory. The benchmark index entered ‘correction’ territory just after midday, marking a 10% decline from its recent February record high before recovering to close ‘only’ 9% down.

A ‘correction’ in markets occurs when a particular stock or index drops by 10% or greater, which in this case was from the February peak of 8,555.80 back on February 14. You’ll see this term thrown about a lot if/when we get there, but remember, it’s arbitrary.

Markets appear to be on Trump/Tariff watch. The sell-off came after the White House confirmed Australia would not be exempt from 25% tariffs on steel and aluminum exports to the U.S. Markets in the U.S. were rattled further, with President Trump threatening to double tariffs on Canadian materials to 50% before suggesting he might reconsider.

Consumer Discretionary (-2.02%) was the worst-performing sector, with retailers Wesfarmers (-2.56%) and Breville Group (-2.67%) some of the biggest fallers. Financial (-1.60%) stocks were among the hardest hit, with all major banks declining substantially - Commonwealth Bank fell 1.44% to $144.80, while NAB (-2.11%), Westpac (-2.02%), and ANZ (-2.10%) each dropped more than 2%.

Utilities (+0.02%) stocks continue to prove their worth as a defensive haven amid uncertainty, with AGL Energy (+2.07%) the standout in the sector.

ASX Company News

• Austal (-22.00%) shares fell after the company completed a $200 million institutional placement at $3.80 per share to expand its U.S. shipbuilding capabilities. The capital raising coincided with a $50 million sell-down by an entity associated with former Chairman and current Non-executive Director John Rothwell. The entity sold 13.2 million shares at the offer price, representing approximately 41.4% of its total holdings.

• Insurance Australia Group (-0.39%) has received over 4,000 claims related to damage from ex-tropical cyclone Alfred and has mobilised additional staff, including property assessment specialists from its New Zealand operations, to process them.

• IPH (-10.0%) shares plunged after the company announced the departure of its long-serving chief financial officer, John Wadley.

• Lotus Resources (+3.03%) has released an updated Scoping Study for its Letlhakane Uranium Project in Botswana, confirming the site's potential to produce 3 million pounds of U3O8 annually with the flexibility to align output with uranium prices.

• Unibail-Rodamco-Westfield (+1.42%) will sell its Bonaire shopping centre in Valencia to Castellana Properties for €305 million, a premium to its book value. The transaction will close in March 2025.

Wall Street

U.S. stocks declined again on Tuesday, with the Dow Jones (-1.14%) seeing the sharpest falls, followed by the S&P 500 (-0.76%) and the Nasdaq (-0.18%). The S&P briefly entered correction territory -10 % below its February high before a partial recovery. Trump's announcement of doubling tariffs on Canadian steel and aluminum to 50% rattled markets, though news of potential Ukraine-Russia ceasefire progress provided temporary relief.

All 11 sectors finished the day lower, led by Industrials (-1.54%) and Consumer Staples (-1.18%). The best performers were Consumer Discretionary (-0.26%) and Technology (-0.38%), although both still finished in the red.

Delta Air Lines (-7.25%) shares plunged following a significant cut to its first-quarter outlook. The airline slashed its earnings forecast to 30-50 cents per share from 70 cents- $1 previously and reduced revenue growth expectations to 5% from 6-8%, citing weakening domestic travel demand. Asana (-24.22%) shares plummeted after CEO Dustin Moskovitz announced his retirement and the company issued disappointing guidance. The workplace productivity platform now expects Q1 revenue of $184.5-186.5 million, below analysts' $191 million forecast, and projected full-year revenue of $782-790 million versus the $803.5 million consensus estimate.

S&P 500 Sector Performance

Economic Data

• South Korea’s Unemployment rate dropped to 2.7% in February, marking its second consecutive monthly decline after a 3.7% read in December and 2.9% in January.

• U.S. Job openings increased by 232,000 to 7.74 million in January 2025, up from 7.51 million in December and beating market expectations of 7.63 million.

• The U.S. Small Business Optimism Index dropped 2.1 points from a month earlier to 100.7 in February 2025, the lowest level since October 2024.

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Quick Singles

🌎️ Around The Globe

• Meta created a special content censorship tool and offered data access to Chinese authorities in a bid to enter the Chinese market, according to an SEC whistleblower complaint.

• Nasdaq Inc. has announced plans to implement 24-hour trading on its flagship U.S. exchange, aiming to capitalise on growing global interest in US equities.

• Ontario has implemented a 25% surcharge on electricity exports to New York, Michigan, and Minnesota in response to Trump administration tariff threats. The move, riding a wave of anti-U.S. sentiment, is expected to generate around $280,000 daily in revenue.

• Southwest Airlines has eliminated one of its most popular customer benefits, restricting free checked bags to only its "most loyal customers." The airline will now limit this perk to select travelers, abandoning its longstanding policy of allowing two free checked bags for all passengers.

• The U.S. Department of Agriculture reported that egg prices have dropped significantly, with a dozen eggs now costing $5.51 —more than $2 cheaper than the all-time high of $8.17 recorded in March 2025.

Markets

ASX Company Movers

Commodity Prices

Bonds

Forex

Global Health Check

ETF Prices

🔍️ ETF Watch

Australian Index

Australian Sectors

Global Indices & Sectors

Global Strategy

Property & Infrastructure

Fixed Income

Mixed Assets

Geared

*1-year, 3-year and 5-year returns are calculated as of January 31, 2025.

A Little Extra

👇️ Short Data

Top 10 shorted stocks on the ASX - as of March 6

💠 The Insiders

Director buying and selling. On-market and Off-Market trades only.
Net Buy/Sell Positions from February 27 - March 11

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DISCLAIMER: Please note that the information provided in this newsletter is for educational purposes only and should not be considered financial advice. It is not intended to encourage you to buy/sell assets or make economic decisions. We strongly recommend conducting your research before making any investment.