Mining stocks weighed down the Australian sharemarket, which retreated from a strong early start on the back of modest gains on Wall Street and ended the day flat.
Wall Street advanced to a 2023 high on the back of a surprising jobs report.Credit: Reuters
The S&P/ASX200 closed virtually unchanged after it lifted 0.6 points, or 0.01 per cent, to 7195.5 at the close, predominantly buoyed by energy stocks, which rose 1.2 per cent.
Meridian Energy was the best performing large-cap stock on the local bourse on Monday, finishing the trading day 3.3 per cent higher. The energy sector climbed 1.2 per cent on the back of the oil price, which steadied after its longest weekly losing streak in five years. Brent crude lifted 2.5 per cent to $US75.91 a barrel.
Energy giant Woodside rose 1.5 per cent, Santos was up 0.6 per cent, Ampol advanced 0.8 per cent, and Whitehaven Coal lifted 0.3 per cent. Yancoal was the only large-cap energy stock to decline after its shares fell 1 per cent.
Ramsay Healthcare (up 1.7 per cent) and Aurizon Holdings (up 1.7 per cent) rounded out the top three large-cap advancers.
JB Hi-Fi shares rose 0.6 per cent despite Maurice Blackburn revealing it had launched a class action against the retail giant, alleging it had sold “junk” extended warranties.
Mining and utilities stocks dragged down the Australian sharemarket on Monday, falling 0.6 per cent. Lithium and gold stocks dropped the most dramatically.
Spot gold was down 1.2 per cent to $US2004.82/oz in New York.
Pilbara Minerals was the worst performing large-cap stock, declining almost 3 per cent. Infratil fell 2.4 per cent and IDP Education fell 2.2 per cent.
Sector heavyweights BHP fell 0.42 per cent, Fortescue lifted 0.7 per cent and Rio Tinto remained relatively unchanged after its shares were up 1¢ to $128.90.
Gold miners Newmont and Northern Star Resources were both down, 1.2 per cent and 2.1 per cent, respectively.
Although Meridian Energy recorded strong gains on Monday, it was unable to offset the losses of other utilities stocks: Origin Energy was down 0.5 per cent, APA Group fell 0.6 per cent, Mercury Nz Ltd declined 0.2 per cent and AGL slumped 0.9 per cent.
FP Markets chief executive Nick Twidale said he was not surprised the Australian sharemarket ended flat on Monday on the back of key data out of the US indicating interest rates could fall more slowly than had been initially forecast.
“With a Wall Street rally, we would expect the ASX to come back better, but there’s a reality that coming into the market that maybe we’re not going to see the interest rates come off quickly,” Twidale said.
“We have key data out in Australia this week, so there’s a bit of consolidation in stock markets.”
On Friday in New York, the S&P 500 rose 0.4 per cent, enough to clinch a sixth straight winning week for the index, which is its longest such streak in four years. Wall Street’s main measure of health is now just 4 per cent below its record set at the start of last year.
The Dow Jones rose 0.4 per cent, and the Nasdaq composite gained 0.4 per cent.
Yields rose more sharply in the bond market following the report, which said US employers added more jobs last month than economists expected. Workers’ wages also rose more than expected, and the unemployment rate unexpectedly improved.
The strong data keeps at bay worries about a possible recession, at least for a while longer, and stocks of some companies whose profits are closely tied to the strength of the economy rallied. Energy-related stocks had the biggest gain of the 11 sectors that make up the S&P 500, rising 1.1 per cent as oil prices strengthened amid hopes for more demand for fuel.
Friday’s jobs report is one of the last major pieces of data the Fed will get before it announces its next move on interest rates on Wednesday. On Tuesday, the US government will give the latest monthly update on how high inflation is for US consumers.
The widespread expectation is still for the Fed to hold its main interest rate steady, according to data from CME Group. But traders are now betting on less than a 46 per cent chance the Fed will have cut rates by March. That’s down from nearly 65 per cent a day earlier.
“Competition is fierce for the limited discretionary spending available, and retailers appear to have pulled no stops this November. But retailers cannot discount forever,” Deloitte Access Economics partner David Rumbens said.
Newly minted Sydney Airport boss Scott Charlton says inbound tourism will continue to be hampered until capacity increases on routes to Europe and the Middle East.
The airport is expecting 2.6 million passengers over the three-week December holiday peak – 500,000 more than in 2022 – but still 5 per cent below 2019.
With AP
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