Profit taking puts end to 10-day surge
The benchmark S&P/ASX 200 Index fell 17.9 points, or 0.4 per cent, to 4878.8, while the broader All Ordinaries lost 18.1 points, or 0.4 per cent, to 4901. For the month, the ASX 200 was up 4.94 per cent.
"The market got a bit ahead of itself and, with the uncertain macro factors we saw last night in the US [GDP], it's prompted consolidation," said BBY institutional trader Anson Rosewall.
Investors were erring on the side of caution, said Mr Rosewall, with the reporting season due to kick off next week.
"[The day] has an overall theme of profit taking, with people not being sure of what exactly to do and that's kind of evident in the mixed rotation we're seeing across the different ASX 200 sectors," he said.
Woolworths fell 1.3 per cent to $31.24 after reporting disappointing quarterly sales results, while Wesfarmers also lost ground, down 1.4 per cent to $37.60.
Despite the iron ore price rising to $US149.40 a tonne, the big miners lost ground. Rio Tinto fell 1.1 per cent to $66.36, BHP Billiton slid 0.4 per cent to $37.48 and Fortescue lost 1.1 per cent to $4.68.
After leading most of the 10-day rally forward, the big four banks eased back, with NAB the biggest loser, down 1 per cent to $27.36.
Retail shares also struggled. Myer fell 2.7 per cent to $2.49, while David Jones lost 1.6 per cent to $2.50 and Harvey Norman dropped 1.8 per cent to $1.96. JB Hi-Fi bucked the trend, gaining 0.2 per cent to $9.90.
Mr Rosewall said he expected trading volumes to be relatively weak next week, but activity should pick up once major companies began reporting.
"It might give investors the conditions to resume buying, but it also might give them a reality check to see whether gains in share prices match up with earnings growth and expected guidance for the financial year," he said.
Whitehaven Coal fell 5.48 per cent to $3.28 after it warned first-half earnings would fall due to weak coal markets and the high dollar.
A report from ratings agency Standards and Poor's warning of the Australian economy's reliance on the mining sector took its toll on the dollar, which is well off its January peak of US105.75¢, sliding about half a cent to US104¢. S&P, which examined several single-sector reliant countries, said Australia was at an intermediate risk of a slowdown in the resources sector.
"As we head into the [RBA] announcement, any sort of economic data suggesting weakness in the Australian economy will triggering selling in the Aussie dollar," Mr Rosewall said.
Frequently Asked Questions about this Article…
The sharemarket pulled back after 10 straight days of gains as investors took profits and grew cautious ahead of the reporting season. The S&P/ASX 200 fell 17.9 points (0.4%) to 4,878.8 and the All Ordinaries lost 18.1 points to 4,901. For investors, this kind of short-term pullback often reflects consolidation — sellers locking in gains — rather than a fundamental market collapse. It’s a reminder to focus on company fundamentals and upcoming earnings rather than short-term price swings.
Profit taking is when investors sell positions that have gained to lock in returns. According to BBY institutional trader Anson Rosewall, profit taking, combined with uncertain macro data from the US, prompted the market to consolidate. That led to a mixed rotation across ASX 200 sectors as some investors stepped back before company results start arriving next week.
The article says trading volumes are expected to be relatively weak next week but should pick up once major companies begin reporting. Reporting season can trigger renewed buying if earnings meet expectations, or a “reality check” if share price gains aren’t supported by earnings growth and guidance — so investors often see higher activity and potential volatility around results.
Woolworths fell 1.3% to $31.24 after reporting disappointing quarterly sales results. Wesfarmers also lost ground, down 1.4% to $37.60. The moves suggest investors reacted to sales news and its implications for near‑term performance.
Despite iron ore rising to US$149.40 a tonne, big miners lost ground: Rio Tinto fell 1.1% to $66.36, BHP slid 0.4% to $37.48 and Fortescue lost 1.1% to $4.68. The article implies broader profit taking and market caution outweighed the one-day rise in the iron ore price, contributing to miner declines.
After leading much of the 10‑day rally, the big four banks eased back. NAB was the biggest loser on the day, down 1% to $27.36. This shows banks can also be impacted by sector rotation and investors taking profits ahead of results season.
Retail stocks generally struggled: Myer fell 2.7% to $2.49, David Jones lost 1.6% to $2.50 and Harvey Norman dropped 1.8% to $1.96. An exception was JB Hi‑Fi, which gained 0.2% to $9.90, bucking the broader retail weakness on the day.
Whitehaven Coal fell 5.48% to $3.28 after warning that first‑half earnings would fall because of weak coal markets and a high Australian dollar. Separately, a Standards & Poor’s report flagged Australia’s reliance on the mining sector and an intermediate risk of a resources slowdown, which weighed on the Aussie dollar — it slid about half a cent to US104¢ from a January peak of US105.75¢. The article notes that any economic data suggesting Australian weakness ahead of the RBA announcement could trigger further selling in the currency.
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