The selloff is due to a number of factors, says Atlantic Pacific Securities. client advisor Gary Huxtable, citing the US earning season, long-term bond yields rising and a few disappointing local updates.
The main culprit for today’s drop is AMP, which is now down more than 8 per cent at a two-year low following this morning’s shock announcement of a $668 million write-down of its wealth protection business.
Three of the big four banks are also trading lower, which isn’t helping the index, while NAB continues to outperform as analysts reassess the lender following yesterday’s solid result.
Also posting gains are the miners, as the rotation from defensives into cyclicals continues. BHP is up 0.9 per cent, South32 is rallying 4 per cent (after a somewhat curious slump yesterday) and Fortescue is up another 1.9 per cent.
“There is definitely a sense of euphoria in the materials space at the moment, with the cycle lows of February now a distant memory, and many investors now sitting on healthy profits,” Huxtable says.