Evening Wrap: ASX 200 turns negative for 2026 as CBA and BHP drag, Firmus IPO jitters hit industrials

In a nutshell:

• The market closed at worst levels as miners tanked and financials continued to roll over, slipping back into negative territory for the year, though defensives like Staples and Utilities caught a bid

• Fortescue's September quarter shipments fell 6% to 46.8Mt and net debt jumped to US$2.8bn, though shares pared most of a 4.2% intraday fall to finish 1.2% lower

• Engineering names like SKS (-9.5%) slumped after the AFR reported Firmus is considering cutting its IPO price from $11 to as low as $8.25

Let's dive in

• The wobbly price action continues, with the ASX 200 failing to muster much of a bounce from session lows and closing at worst levels, back to negative (0.61%) YTD. That said, the session wasn't all that downbeat, with a few sectors catching a bid, a handful of interesting reversals and a big uptick in copper prices

• Energy is starting to turn after a ~6.5% pullback over the past month, now up ~2% over the last three sessions and reclaiming its 50-day moving average. Brent is back at US$102 a barrel after falling to the US$95s a week ago

• Classic defensives like Staples, Utilities and Telcos also outperformed. Staples and Utilities have traded pretty much sideways since June, while Telcos have staged a small bounce off a two-year low

• Bond yields continue to chop mostly higher, though every day seems to be characterised by a 10 bp trading range. I'll write in the Evening Wrap that they're trading sharply lower, only for them to close flat overnight, or vice versa. Aussie yields are currently flat across the board, with the policy-sensitive 3-year at 4.90%, still well off the 24 September high of 5.10%, and the 10-year at 5.39%, still close to the recent 5.45% high

• Financials are starting to look ugly, testing the 9,000 mark, a level the sector has held through numerous pullbacks in recent months, including May/June 2026 and November 2025. CBA fell 1.5% to $148.12, down almost 20% since early August with very little bounce, and is on the cusp of trading at its lowest level since April 2025. Westpac and NAB also look like they're rolling over, while ANZ, likely helped by its company-wide cost-out and transformation strategy, traded flat and continues to hold up well

• Miners struggled as commodities (ex-Energy) traded broadly lower overnight and the US Dollar Index continued its vertical move to the highest level since April 2025. BHP (-2.0%) and Rio Tinto (-2.8%) were notably lower, while Fortescue (-1.3%) managed to reverse most of its 4.2% intraday decline. Interestingly, copper and gold trended higher during our session, up 1.3% and 0.5% respectively, though copper equities didn't catch much of a bid and gold miners only edged off session lows. The commodity price uplift is likely driven by China returning from its week-long National Day holiday, plus a strike at Antofagasta's Centinela project in Chile

A few stocks and sub-sectors of interest:

• Fortescue released its September quarter report early, and it was ugly across the board. Iron ore shipments fell 6% quarter-on-quarter to 46.8Mt, with maintenance and a scheduled port outload shutdown weighing on volumes. The hematite realised price was US$80/dmt, or 82% of the benchmark, possibly reflecting pressure from Chinese buyers, and that's before shipping costs. Net debt jumped to US$2.8bn from US$0.9bn at 30 June after the US$1.0bn final dividend and US$0.9bn of capex

• Lots of chatter about Firmus, with the AFR reporting the company is considering cutting the IPO offer price from $11 to $9, or even $8.25 a share, due to weaker-than-expected demand. The bookbuild closed on Thursday without a clear indication of price or deal structure

• The news hit engineering names that have delivered explosive earnings growth off the back of the data centre build-out. Notable decliners included SKS (-10.1%), Southern Cross Electrical Engineering (-6.8%), NRW Holdings (-4.0%), GenusPlus (-3.0%) and GR Engineering (-3.3%). These stocks are all up massively year-to-date. Earnings are growing strongly, but valuations have also re-rated aggressively. SKS, for example, posted 93% growth in FY26 underlying NPAT and guided to ~52.5% PBT growth in FY27, but its trailing PE has gone from ~25x at the start of the year to 37x now. Perhaps this is just a sentiment-driven selloff, and therefore, a pullback worth watching

• ASX (the exchange operator) rallied 3.8% after UBS retained its Buy rating and edged its target price higher to $65.50 (from $64.20). This followed yesterday's monthly activity report, which showed Q1 futures volumes up 33% year-on-year, well ahead of 7% growth in cash equity turnover. It's pretty wild to see the stock up 17.6% year-to-date, reversing the entirety of its ~24% late-May selloff triggered by higher-than-expected capex guidance

No major economic announcements.