WOW drags stocks deeper into the red

Aussie Shares dusted off overnight leads and switched to losses in early trade. The AGM and quarterly update season gave traders a reason to exit their exposures.

The financials and supermarket giants were the target of enthusiastic selling across the session. Investors traded WOW down almost 10%.

Investor’s panicked themselves in a rush to mass-exit both Woolworths and Wesfarmers following WOW’s brutal profit forecasts. Woolworths warned of a potential 35% drop in the first half net profit with the supermarket already struggling to claw back market share from its peers Wesfarmers and international threat ALDI.

Inter-sector rotation appeared to be at play with recent reporting banks NAB and ANZ also on the receiving end of position closures. Investors voted with their feet with both banks enduring a heavy sell off across the trading day, NAB shed 4% and ANZ dusting 2%. The other two big banks CBA and Westpac both oscillated in mild green, suggesting inter-sector switching.

In afternoon trading the local bourse gave up about 1.3%. Notable volumes have returned to the markets with the FOMC making it clear that a December rate hike is a live option. The local currency is positioned dead on the 0.71 handle following USD strength overnight. Any support for the local currency could possibly come when a second offering of inflation data is released on Friday.