CSL, BHP push ASX lower

Concerns of a slowdown economic growth in China rattled the local sharemarket as it began the new year. On Wednesday, data showed factory activity in China contracted during December for the first time in 19 months. A day later, Apple downgraded its revenue forecasts, citing economic deterioration” in the country.

The news hit the major mining stocks this week, with most of them heavily reliant on China’s consumption. BHP Group slid 2.5 per cent to $33.38, Rio Tinto closed the week 2.1 per cent lower at $76.83 and South32 declined 2.1 per cent to $3.28.

Retail stocks were also hit during the week after Kathmandu flagged a weaker Christmas selling period as it downgraded profit expectations. With most retailers yet to report their figures, investors took the downgrade as a sign of broad based weakness in the sector. Kathmandu shares declined 15.1 per cent to $2.20, JB Hi-Fi slid 7.8 per cent to $20.42, Super Retail Group closed 6.5 per cent lower at $6.57, Myer declined 4.8 per cent to 39.5¢ and Baby Bunting ended the week at $2.09, down 3.7 per cent.

The more defensive sectors of the market had another strong week as investors sought out safe-haven assets. The price of gold has enjoyed a strong start to the year, as gold futures rose to their highest level since June, amid volatility in the equity and currency markets. Newcrest Mining climbed 7.9 per cent to $23.53 this week, Evolution Mining rose 5.7 per cent to $3.90, Northern Star Resources climbed 5.1 per cent to $9.71, Saracen Minerals advanced 8.2 per cent to $3.17 and St Barbara closed 6.2 per cent higher at $4.99.

GP clinic and pathology centre owner Healius received a $2 billion takeover offer from China’s Jangho Group, with the offer worth $3.25 a share. Jangho is already the company’s largest shareholder and controls 15.93 per cent of the company. News of the takeover may have leaked to the market early, with the company’s share price soaring a day before the offer was announced. Healius shares closed the week 23.3 per cent higher at $2.75.

​Pilbara Minerals closed the week 12.8 per cent higher at 70.5¢ after it announced it had secured $231 million worth of expansion funding from Chinese backers and separately announced it had signed a memorandum of understanding with South Korean steel giant POSCO to pursue a joint venture in chemical conversion.