Source : THE AGE NEWS
By Daniel Lo Surdo
Welcome to your five-minute recap of the trading day.
The numbers
The Australian sharemarket closed lower on Friday, with gains from the industrials sector offset by weakness in financial stocks after Wall Street fell following a mixed set of earnings reports from some of its biggest companies.
The S&P/ASX 200 fell by 16.6 points, or 0.2 per cent, to 8310.4 points at close, with three of the 11 industry sectors retreating. It comes after the ASX surged by 1.4 per cent and added close to $34 billion on Thursday. The Australian dollar saw minor losses, and was valued at 61.99 US cents as at 5.12pm.
Wall Street is treading water a day after surging higher. Credit: AP
The lifters
The best performing sector was industrials (0.7 per cent), with Transurban (up 1.3 per cent), Qantas (up 1.1 per cent) among the gainers.
Origin Energy (up 0.3 per cent), AGL Energy (up 0.7 per cent) and APA Group (up 0.9 per cent) pushed the utilities sector into positive territory, while Santos (up 0.6 per cent) and Yancoal Australia (up 1 per cent) also gained. BHP (up 0.2 per cent) edged higher, and Fortescue added 1.8 per cent.
Wealth business Insignia Financial jumped 6.5 per cent, after telling shareholders it had received an improved takeover bid from private equity firm CC Capital Partners. The new offer proposes a full takeover at $4.60 per share, higher than the $2.9 billion bid (priced at $4.30 per share) put forward two weeks ago.
The embattled Star Entertainment added 3.7 per cent, recouping some of the losses incurred after announcing a severe cash crunch which stoked fears of the company falling into administration.
Lovisa shares increased by 7.8 per cent after Morgan Stanley upgraded the stock to an overweight rating. Aussie Broadband shares grew 5.5 per cent, after appointing Brian Maher as group chief executive.
Telix Pharmaceuticals progressed by 3.1 per cent, after its prostate cancer imaging agent Illuccix was approved by Europe’s marketing authorisation application.
The laggards
Rio Tinto lost 0.7 per cent, after Bloomberg reported that the mining giant was exploring a merger with Glencore in a deal valued at $254 billion that would represent the mining industry’s largest-ever deal. Glencore shares gained 0.4 per cent in London trading.
The Perth-based Lynas Rare Earths lost 0.9 per cent after announcing growing sales revenue in the December quarter.
The finance sector lost 1 per cent, spurred by Commonwealth Bank (down 1.2 per cent), Westpac (down 1.5 per cent), NAB (down 1.7 per cent) and ANZ (down 1.8 per cent). Insurers QBE (down 0.2 per cent) and Suncorp (down 0.1 per cent) also retreated.
WiseTech Global continued a tumultuous week of trading, losing 0.8 per cent after a strong performance on Thursday.
The lowdown
Encouraging US inflation figures released before trading on Thursday helped to push the Australian sharemarket to a 0.2 per cent gain over its second trading week of 2024.
The figures, which showed US underlying inflation slowed to 3.2 per cent in December, came as Australia’s labour force data released on Thursday showed unemployment ticked up to 4 per cent in December, while 56,300 new jobs were created.
The figures emboldened some economists’ view that the Reserve Bank is likely to leave the cash rate unchanged at its February meeting, while others found to the release of December inflation data – due on January 29 – would be a bigger influence on the central bank.
Markets will be focused on Washington DC next week as Donald Trump begins his second presidential term. Trump’s inauguration will happen on Monday (Tuesday morning AEST), with markets focused on any economic announcements from the incoming administration and persistent geopolitical risks.
AMP chief economist Shane Oliver expected a “flurry of day one pronouncements” from Trump, such as on tariffs, financial and energy deregulation, and cryptocurrency. But he said many of his policies flagged ahead of his inauguration “may not go anywhere”.
“Trump’s desire to see shares go up, political pressure to bring down the cost of living – whereas big tariff hikes would do the opposite – and fiscally conservative House Republicans will hopefully keep a lid on his populist inflation-boosting tendencies, including the tariffs, but this may not be clear for a while,” Oliver said.
In the US, stock indexes drifted lower following a mixed set of earnings reports from Morgan Stanley, UnitedHealth Group and other big companies.
The S&P 500 slipped 0.2 per cent after flipping between small gains and losses through the day. More stocks rose within the index than fell, but drops for some influential stocks like Tesla outweighed them. The Dow Jones dropped 68 points, or 0.2 per cent, and the Nasdaq composite fell 0.9 per cent.
The three earning reports suggest the US economy is nowhere near a recession but may be showing some signs of slowing that could keep pressure off inflation.
Tweet of the day
Quote of the day
“It’s about copper and critical minerals, and the deal would make them an absolute powerhouse … but with that many critical minerals in one hand, I dare say it might hit regulatory issues.”
MPC Markets chief executive Mark Gardner, on the reported merger talks between mining giants Rio Tinto and Glencore.
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With AP
The Market Recap newsletter is a wrap of the day’s trading. Get it each weekday afternoon.
