Source : the age
The Australian sharemarket declined on Thursday, despite a strong lead from Wall Street where strong results from SpaceX and other big companies boosted sentiment. Furniture retailer Nick Scali’s shares plummeted after a profit warning.
The S&P/ASX 200 fell 38.1 points, or 0.4 per cent, to close at 8793.20, weighed down by energy and mining stocks. Tech stocks advanced, tracking the positive sentiment for the sector in the US. Thursday’s market decline followed a volatile session on Wednesday, when the local bourse swung between gains and losses before closing 0.2 per cent higher.
Nick Scali dived 15.3 per cent after warning its sales in the December half will be 11 per cent to 14 per cent below last year’s as consumers tightened their belts after the federal budget in May. Hit by lower demand amid the cost-of-living crisis and rising interest rates, it expects net profit to fall by as much as 32 per cent to $28 million to $32 million in the period.
The profit warning weighed on other retailers, with fellow furniture seller Harvey Norman down 2.9 per cent, while Bunnings and Kmart owner Wesfarmers fell 3.1 per cent and electronics retailer JB Hi-Fi lost 1.7 per cent.
The Australian dollar was trading at US70.16¢ late on Thursday after hawkish Reserve Bank comments on Wednesday, which boosted rate hike bets for next month.
Expectations of another rate rise as early as next month have been rising after Reserve Bank deputy governor Andrew Hauser said this week that Australia’s inflation outlook looked “materially worse” than predicted in August, citing higher oil and technology prices. He warned mortgage holders and businesses the bank is facing “hard choices” in its bid to bring down inflation amid warnings it risks pushing the country into recession.
Traders price about a 43 per cent chance of a rate rise at the end of the RBA’s two-day meeting on November 3, up from about 30 per cent before Hauser’s comments. A 25 basis point rate rise is all but fully priced for February, brought forward from expectations it may occur in May.
On the energy front, oil rose again overnight following a deadly attack on a Saudi oil field, raising concerns that escalating hostilities in the Middle East could hit supply even as exports through the Strait of Hormuz have accelerated in recent months.
West Texas Intermediate climbed towards $US98 a barrel, while Brent jumped above $US110 in post-settlement trading. A drone strike on Saudi Aramco’s Shaybah field killed two people, although operations were unaffected. Meanwhile, the US has ordered the departure of some personnel and family members from US embassies in the kingdom.
Local energy stocks were down, however. Santos fell 1.3 per cent after its latest production report, while Woodside shed 3.5 per cent.
The Big Four banks closed higher. CBA edged up 0.1 per cent, National Australia Bank lifted 0.2 per cent, Westpac moved 0.4 per cent higher, while ANZ Bank rose 1.2 per cent.
Westpac is cutting another 140 roles, the latest sign that Australia’s weak housing market and an increased use of artificial intelligence technology are biting into the country’s workforce. The Sydney-based bank informed the Finance Sector Union of 140 job cuts this week, following a further 102 cuts announced to the union two weeks ago, according to a Westpac spokesperson.
Iron ore giant Fortescue fell 4.5 per cent after warning its operations might be affected if the tough pricing negotiations with China’s state-backed buyer aren’t concluded by year-end. The nation’s third-largest miner has become targeted by China’s push to force down iron ore prices, putting future revenues from its single biggest market under pressure.
Bigger rivals BHP and Rio Tinto, which have been pivoting towards copper to tap demand for the red metal in the AI boom and reduce their reliance on ore, fell 2.4 per cent and 1.5 per cent, respectively.
Meanwhile, tech companies continued their relief gains after encouraging earnings from tech and AI companies on Wall Street, which helped boost confidence in the tech trade.
Software maker WiseTech rose 3.1 per cent and cloud connections provider Megaport climbed 4.4 per cent. Embattled data centre operator NextDC jumped 7.5 per cent, paring back a fraction of its more than 40 per cent slump on Wednesday when it gave a profit warning over community backlash to extend its major data centre in Melbourne.
On Wall Street overnight, the S&P 500 added 0.6 per cent and pulled within 0.8 per cent of its all-time high set earlier this month. The Dow Jones Industrial Average gained 360 points, or 0.7 per cent, and the Nasdaq composite climbed 1.1 per cent.
