Australian shares closed lower on Friday, retreating from record highs and posting the biggest decline in six weeks as concerns over slowing economic growth in China soured sentiment.
The benchmark S&P/ASX 200 closed 0.9% lower at 8283.2, down from a record peak of 8355.9 in the previous session.
However, for the week, the ASX 200 posted a 0.8% gain, marking its second consecutive weekly increase, with the index up 9% year-to-date.
Flight Centre Travel Group led the losses after a vague trading update raised concerns of a potential profit downgrade. Shares plummeted over 20.4% to $17.20, marking the worst one-day decline for the company since the pandemic began.
All 11 sectors ended in negative territory, with utilities leading the declines. APA Group dropped 6.3% to $7.16 following a $500 million share sale by its largest shareholder, Unisuper, after the markets closed on Thursday.
Commodities suffered as iron ore prices hovered near $100 per ton after a 5% drop overnight.
Major miners BHP, Rio Tinto, and Fortescue Metals fell 2.2%, 0.9%, and 1.9%, respectively.
However, gold miners saw gains after the precious metal surged to a new all-time high above US$2,712 per ounce, with De Grey Mining rising 1.5% to $1.39.
On the bond markets, 10-year rates were at 4.311%, and 2-year rates were at 3.902%.
Flight Centre Travel Group's trading update
• Market guidance to be provided at AGM (Nov 14), with profit again expected to be heavily second half weighted
• Trading marginally above FY24 Q1 across most key metrics – TTV, profit margin, underlying profit - but currently too early to draw conclusions as to likely trading patterns over the full year.
• Similar trends to late FY24 in early FY25 trading – some inconsistency month-to-month
• Global corporate sector activity was flat during the first quarter (Source: MIDT). Wins helped drive TTV and transaction volume growth in FLT’s global corporate business, but first quarter growth was adversely impacted by airfare deflation & downtrending in some large accounts. Positive early signs for October.
• Starting to enter a seasonally busy trading period with leisure sales underway & corporate travel activity set to increase after the Northern Hemisphere holiday period.
• Continuing to monitor broader macro-economic conditions & their impacts on overall track sector growth (cyclical factors) in the short-term & ahead of seasonally strong trading periods.
• Currently expecting normal industry growth over the full year (as announced previously) with circa 4-5% growth in Australian outbound travel.
• Also continuing to monitor airfare price deflation given its impact on short-term TTV growth – solid growth in international ticket volume in Australia during the first quarter but largely being offset by deflation.
• Ongoing focus on 2% underlying PBT margin but overall profit growth is the main priority
• Investing for the future – growing & gaining scale in low profit margin businesses to help drive future earnings & to capitalise on opportunities that arise within the market.
As of 5:10 pm AEDT, Friday, October 18, the Flight Centre Travel Group (ASX: FLT) stock price was $17.20, showing a significant decrease of 20.44% from the previous close of $21.621. The stock reached a day low of $17.10 and a day high of $19.761. Flight Centre's market cap stands at $4.73 billion.