PEAK ASSET: ARVO WRAP 3 OCTOBER: ASX tumbles 1.3pc to six-month low | BHP, Woodside sink | ECS Botanics signs $24M medicinal cannabis supply deal with MediCann Health |

A rainy day here in Melb to bring us back to reality!

From the ESG space…

A number of countries have now put forth ambitious emission reduction targets.

French President Emmanuel Macron unveiled the country’s “ecological plan” to cut greenhouse gas (GHG) emissions by 55% by 2030, compared to 1990 levels, in line with the EU’s interim climate goals.

In order to kick-start progress, the strategy includes a plan to significantly ramp climate-focused investments to €10 billion next year, compared with €3 billion in 2023.

Key areas of investment include boosting building energy efficiency, developing energy technologies including hydrogen and renewable natural gas, and natural resources, farming, agriculture and forestry.

Click here to read more.

Across Markets…

The Australian sharemarket tumbled below 7000 to a near six-month low on Tuesday, taking its cue from a rout in US Treasuries overnight and shrugging off the Reserve Bank’s widely expected decision to keep the cash rate at 4.1 per cent.

More hawkish messaging from the US Federal Reserve triggered the broad sell-off and sent the benchmark S&P/ASX 200 index down 1.3 per cent, or 89.8 points to 6943.4 at the closing bell.

Ten out of the 11 industry groups were in the red, with the energy and mining sectors both off more than 2 per cent. The All Ordinaries dropped 94.5 points to 7141.

The market is “a bit worried” about the latest jump in the 10-year bond yield, Tribeca portfolio manager Jun Bei Liu told The Australian Financial Review.

“The rally in long-term bond yields just means the market is saying that the interest rate will stay higher for longer. And that’s pretty negative for the equity market because that just means the return will be significantly lower.”

Yields on five-year to 30-year US Treasuries rose 10 basis points overnight, while the rate on the 10-year benchmark bond hit the highest since 2007, reaching 4.7 per cent and the 30-year topped 4.81 per cent, the highest since 2010.

Michael Barr, the Fed’s vice chairman for supervision, said the big question for central banks was how long to leave interest rates elevated to combat inflation, while Fed governor Michelle Bowman reiterated her call for a number of rate increases.

Morgan Stanley said traders had raised bets on a November 1 rate rise in the US to a “roughly one-in-three chance from 25 per cent on Friday”.

After falling more than 1 per cent overnight, the Australian dollar on Tuesday sank to its lowest in 11 months to US61.4¢ after the RBA failed to surprise. The central bank kept a mild bias to increase rates again, saying inflation was “still too high”.

Australian bond yields also eased a touch as traders had expected the RBA to harden its commitment to return inflation to target in the policy statement. The three-year government bond fell 3 basis points at 4.10 per cent and the 10-year off 2 basis points to 4.56 per cent. Three-year bond futures retreated five ticks to 95.87.

The major miners all dropped, tracking the weakened iron ore price. ASX heavyweight BHP Group lost 1.7 per cent to $43.84, Rio Tinto declined 1.8 per cent to $112.80 and Fortescue dropped 1.6 per cent to $20.73. 

Singapore iron ore futures were down 0.9 per cent to $US117.15 a tonne on the November contract in late afternoon trading. 

Energy stocks were the worst performing as West Texas Intermediate traded near $US88 a barrel after declining by 2.2 per cent in the previous session. Woodside Energy dropped 3.7 per cent to $34.90, Santos shed 4.3 per cent to $7.53 and Ampol lost 1.4 per cent to $33.35. 

Source: AFR