Evening Wrap: ASX 200 slumps as November rate hike near-certain, Wesfarmers drops as Ramsay Health pops

The S&P/ASX 200 (XJO) finished 89.6 points lower at 9,038.2, 1.0% from its session high and just 0.1% from its low. In the broader-based S&P/ASX 300 (XKO) advancers lagged decliners by a dismal 63 to 222.

Health Care (XHJ) (+0.2%) was the session’s lone positive sector — and given the macro backdrop, holding above water at all constituted a meaningful achievement. Ramsay Health Care (RHC) (+13.7%) was the primary driver, delivering a full-year result that surpassed expectations and highlighted how decisively the hospital operator’s recovery from the post-COVID staffing crisis has taken hold.

Ansell (ANN) (+1.7%) extended its post-results surge. CSL (CSL) (+0.8%) and Telix Pharmaceuticals (TLX) (+0.6%) were also modestly higher. Healthcare’s defensive earnings characteristics — revenues that don’t depend on household confidence or mortgage affordability — are precisely what investors reach for when nerves are rattled!

Energy (XEJ) (-0.2%) was the next closest to flat, with coal names gaining, and oil producers holding ground even as ICE Brent crude futures fell 1.6% to US$85.54/bbl. Yancoal Australia (YAL) (+1.2%), Whitehaven Coal (WHC) (+0.6%), and New Hope Corp. (NHC) (+0.5%) were the best in coal. Majors Woodside Energy (WDS) (+0.3%) and Santos (STO) (+0.1%) were essentially flat.

Financials (XFJ) (-0.7%) underperformed the broader market’s decline — a relative win driven by defensive crowding into the sector’s size and dividend yield. Perpetual (PPT) (+3.3%) was the standout, but Insurance Australia Group (IAG) (+1.0%) and QBE Insurance (QBE) (+0.6%) both firmed. Commonwealth Bank (CBA) (-0.3%) was solid all things considered re rates outlook…

Consumer Discretionary (XDJ) (-3.2%) was hardest hit. The July household spending data was both reassuring about the economy’s resilience and deeply alarming about the inflation implications — a 1.1% monthly jump in real (inflation-adjusted) spending across all nine categories surveyed tells the RBA precisely what it doesn’t want to hear: demand is not cooling.

Wesfarmers (WES) (-4.6%) bore the heaviest losses, compounded by full-year results that disappointed relative to elevated expectations across its Bunnings and Kmart divisions. JB Hi-Fi (JBH) (-4.5%) was next, followed by Temple & Webster (TPW) (-4.1%). Lovisa (LOV) (-2.6%) fell after its FY results, having entered the session with elevated expectations following Wednesday’s 5.2% pre-result surge.

Consumer Staples (XSJ) (-1.4%) was caught in the same inflation-repricing. Defensive staples stocks typically hold up in rate-hike environments, but not today… Metcash (MTS) (-2.3%), Woolworths (WOW) (-1.6%), and Coles (COL) (-1.2%) all retreated from recent results-driven highs.

Information Technology (XIJ) (-2.4%) extended its correction as WiseTech Global (WTC) (-3.3%) continued to slide post-results — now down more than 13% across two sessions. Catapult Sports (CAT) (-2.9%), Technology One (TNE) (-2.7%), and Xero (XRO) (-2.6%) were all caught in the sector-level selling.

The Gold Sub-Index (XGD) (-1.5%) pulled back as COMEX gold futures fell 0.9% overnight before easing a further 0.1% to US$4,650/oz in Asian trade — gold struggling to hold its gains key benchmark bond yields edged higher again overnight. Westgold Resources (WGX) (-4.0%), Ramelius Resources (RMS) (-3.2%), and Genesis Minerals (GMD) (-2.9%) were all lower. Northern Star Resources (NST) (+1.0%) was the notable exception, bucking the sector’s negative tone.

Materials (XMJ) (-1.2%) entered its second consecutive session of pullback as COMEX copper futures fell 1.7% overnight before easing a further 0.5% to US$6.564/lb in Asian trade — the metal pulling back from its recent record highs on fears that higher benchmark rates could pressure global economic growth. Sandfire Resources (SFR) (-3.6%), BHP (BHP) (-1.5%), and Rio Tinto (RIO) (-0.5%) were all lower. South32 (S32) (+1.4%) was a positive exception on solid results.

Lithium stocks extended their losing run despite GFEX lithium carbonate futures barely moving — down just 0.1% to CNY 152,020/t. Elevra Lithium (ELV) (-4.9%), Liontown Resources (LTR) (-4.6%), Core Lithium (CXO) (-2.7%), Pilbara Minerals (PLS) (-2.6%), and Mineral Resources (MIN) (-2.3%) were all lower.