The Australian share market gave up morning gains to finish in the red again, as US share futures point to renewed losses on Wall Street tonight.
Australian shares had been rebounding from yesterday’s heavy sell-off, which wiped $46 billion off the market and took it to a three-week low.
Both the benchmark ASX 200 and broader All Ordinaries indices were up 1.2 per cent in early trade.
However, the market reversed sharply in the afternoon, closing around 100 points off this morning’s intraday peak.
A major factor in the late swing lower was a decline in US share futures, with the S&P 500 contract down 1.3 per cent late in the Australian afternoon, pointing to renewed selling on Wall Street tonight.
The benchmark ASX 200 index lost 0.6 per cent on yesterday’s close to finish at 6,607, while the All Ords shed 0.7 per cent to 6,871 having briefly passed 7,000 points early in the session.
The index falls came despite more than half the companies on the ASX 200 posting gains — with 106 in the black and 11 steady for the day.
But it was the large blue-chip miners and banks that were sold off in the afternoon, leading the indices lower.
Fortescue Metals dropped 4.1 per cent, with Rio Tinto losing 3 per cent and BHP Billiton 1.6 per cent.
Falls in major energy producers, such as Woodside Petroleum (-2.7pc) and Whitehaven Coal (-3.9pc) also dragged on the broader market — energy was the worst-performing sector.
All four major banks posted substantial declines, led by a 2.1 per cent drop for ANZ, while Westpac had the smallest fall of the group at 1.5 per cent.
Network designer, engineer and operator Service Stream jumped 10.1 per cent, real estate advertiser Domain was up 8 per cent, medical information systems provider Pro Medicus climbed 4 per cent and some smaller miners, such as gold producers Evolution (+4pc) and Ramelius (+3.7pc), bucked the general downward trend in resources.
Domino’s will return JobKeeper payments it received last year, saying the need for the coronavirus wage scheme has passed.
In a note to the Australian Stock Exchange (ASX) on Friday, the fast-food giant confirmed it would return $792,000 to taxpayers by the end of the current financial year.
Domino’s franchises were eligible for JobKeeper during the pandemic when businesses were under strain from state-imposed lockdowns and travel restrictions.
But Domino’s had a strong year in 2020. Profit rose to $138.4 million across the chain, driven by revenue growth of 32.7 per cent to $1.9 billion as locked-down consumers sought home-delivered food.
Domino’s Group CEO and managing director Don Meij said the Federal Government’s short-term assistance had served an important purpose — “to keep employees connected to their employer where their work had stopped through no fault of their own”.
“We appreciate the availability and support of JobKeeper during a period of significant uncertainty,” Mr Meij said.
The company said no executive had received short term incentives for the financial year where JobKeeper had contributed to their division’s performance.
A small number of independently-owned Domino’s franchisees have separately received JobKeeper support, the statement said.
The company said the return of the JobKeeper payments will happen later this year.
It follows a bounce back on US markets as it also tried to recover from yesterday’s sharp losses, after fears eased around hedge funds selling off long positions to cover a “short squeeze”.
Shares in videogame retailer GameStop (-44.1pc) and cinema chain AMC Entertainment (-56.6pc) tumbled overnight.
This was after trading platforms like Robinhood and Interactive Brokers restricted trading in stocks that soared this week in a social media-driven trading frenzy that shook stock markets.
On Wall Street, the Dow Jones ended its day 300 points (+1pc) higher at 30,603.
The S&P 500 rose (+1pc) to 3,787, while the Nasdaq Composite lifted (+0.5pc) to 13,337 points.
European markets were mixed, with Britain’s FTSE down (-0.6pc) to 6,526 and Germany’s DAX up (+0.3pc) to 13,666.
The Australian dollar fell to 76.5 US cents by 5:20pm AEDT.
Tech heavyweights including Microsoft, Facebook, Netflix and Alphabet led the gains, a day after the US stock indices endured their worst session in three months.
With the quarterly earnings season in full swing, market participants have now started to question whether companies including Apple, Facebook and Tesla can sustain their high valuations.
“Investors are digesting earnings that came out overnight and this morning, and taking a look at the fundamentals of what’s going on in specific companies, as well as any outlook that can be provided to try to justify valuations,” said Brian Vendig, managing executive at MJP Wealth Advisors in Westport, Connecticut.
Apple reported holiday-quarter sales and profit that beat Wall Street expectations, however, shares of the iPhone maker fell 2.3 per cent.
Facebook shares dropped (-2.2pc) despite the company soundly beating quarterly revenue estimates.
Tesla’s stock fell (-2.3pc) after the electric vehicle maker posted disappointing December-quarter results and failing to provide a clear target for 2021 vehicle deliveries.
Meanwhile, the US economy grew at a 4 per cent annualised rate, in line with expectations, as the virus and lack of another spending package curtailed consumer spending. That was according to the December-quarter GDP figures from the US Commerce Department.
A separate report showed 847,000 more Americans likely filed jobless claims last week, lower than what the market had expected (875,000).
Concerns about slowing momentum in economic recovery due to rising coronavirus cases, heightened stock market valuations, and uneven distribution of vaccine rollouts have kept investors on edge about a pullback and increase in volatility in the near-term.