The ASX200 closed down 0.20% today led by falls in the Financials sector, which were set against strength in the Materials space.
The story of the day was a call by Macquarie that clients should be “underweight everything” when it comes to ASX-listed banks.
A recent surge in bank shares — to 35-year highs — has been behind the ASX’s push to recent record highs. However, given the lofty valuations of the banks, it could all come crashing down suggests Macquarie.
It warned in a note to clients, “Bank share prices have continued to rally in recent months despite broadly consistent negative consensus views amongst investors and sell-side analysts.
“The natural question we ask ourselves is – what are we missing?”
NAB lost 2.76% today, Westpac fell 3.75%, ANZ was down 3.76% while CBA and Macquarie each lost more than 1%.
On a positive note, Materials was up 1.85% buoyed by iron ore miners Rio Tinto, BHP and Fortescue. BHP gained 2.65% after being upgraded to a buy rating by analysts at Citi. It has further support from copper prices, which rose to an 11-month high overnight on fears of production cuts from Chinese smelters.
Arafura Rare Earths, which is backed by Gina Rinehart, closed up 76% after receiving a $840 million Federal package of loans and grants to help develop its mine and refinery in the Northern Territory.
Meanwhile, Appen lost 17% to 80¢ after New Jersey-based Innodata withdrew its $154 million bid for the company.
Five at five
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Torque Metals uncovers high-grade lithium at New Dawn; peak grade of 4.42%
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On your six
Calls for "clean, green premium" on Australian nickel
A surge of cheap Indonesian nickel is flooding the global market, driving down prices and threatening the stability of the Australian nickel industry.
One to watch
Resource Mining Corporation makes significant gold and copper discoveries
Resource Mining Corporation Ltd (ASX:RMI) director Trevor Matthews joins Jonathan Jackson in the Proactive studio following the discovery of significant gold and copper at Mpanda in the Ubendian Orogenic Belt of Tanzania.