[NEWS] ASX trims during Friday’s trading

- URL: [https://www.perthnow.com.au/business/asx-trims-during-fridays-trading-c-16921130]

◆ B1 Level

The Australian sharemarket went down a bit from a recent high on Thursday because people don't expect a rate cut in early 2025. The benchmark ASX200 dropped 8.1 points, or 0.10 per cent, to close at 8436 points, while the broader All Ordinaries index fell 0.90 points, or 0.01 per cent, to settle at 8,699.10. The Australian dollar ended slightly higher at 65.07 US cents.

 

On a mixed day for the ASX, seven of the 11 sectors traded lower with gains in materials and IT offset by falls in real estate, industrials, and healthcare. Overall trading on Friday’s share market was light because the US markets were closed for Thanksgiving.

 

AMP chief economist Shane Oliver said the financial markets now expect a later rate cut. “The RBA basically said it’s too early to cut rates. While I am a bit more optimistic than the board, unless we see much lower inflation in December, they will likely wait until May for any rate cut,” he said. ANZ head of Australian economics, Adam Boyton, agreed with Dr. Oliver, noting recent comments from RBA governor Michele Bullock. “With the board still focused on demand exceeding supply, our forecast for six-month annualised inflation to fall just within the RBA’s target by the February meeting no longer seems enough,” Mr. Boyton said. Three of the big four banks traded lower because of the unlikely rate cuts, adding more pressure on mortgage holders to repay their loans.

 

NAB fell 1.09 per cent and was the worst of the big four, while ANZ fell 1.05 per cent. Westpac slid 0.12 per cent while Commonwealth Bank overcame falls in the morning trading to close flat at $158.58. The price of iron ore rose during trading by 1.6 per cent to a three-week high of about $US104.70 a tonne.

 

This was good for Australia’s iron ore miners with Fortescue Metals going up 1.55 per cent to $18.99. BHP rose 1.25 per cent while Rio Tinto went up 0.94 per cent. Dr. Oliver said the price of iron ore has been trading between $90 to $110, depending on how the Chinese government stimulates the economy. “There is talk of more China stimulus, which now seems not as good as the market was hoping, but not so bad either, which is why the iron ore price has kept half of its gains. “The problem is any Chinese stimulus will be made to counter Donald Trump’s stimulus package. It won’t have the same positive effect on commodities as before. Many past stimulus measures were based on infrastructure spending. Now, you could say they have already done that and will focus on consumer spending,” Dr. Oliver said.

 

Travel stock Webjet was the best performing stock on the ASX 200, up 4.88 per cent, while Megaport Limited went up 3.67 per cent. Healthcare was pulled down as CSL fell 1 per cent but Pro Medicus rose 1.5 per cent to a new high after its Trinity Health contract win this week. Telix Pharmaceuticals and Sigma Healthcare also went up 4.03 and 3.95 per cent respectively.

 

◆ B2 Level

The Australian sharemarket fell slightly from a recent high on Thursday, as expectations for a rate cut in early 2025 decreased. The benchmark ASX200 dropped 8.1 points, or 0.10 per cent, to close at 8436 points, while the broader All Ordinaries index fell 0.90 points, or 0.01 per cent, to settle at 8,699.10. The Australian dollar ended slightly higher, buying 65.07 US cents.

 

On a mixed day for the ASX, seven of the 11 sectors traded lower with gains in materials and IT offset by falls in real estate, industrials, and healthcare. Overall trading on Friday’s share market was light, with the US markets closed for the Thanksgiving holiday.

 

AMP chief economist Shane Oliver said the financial markets now expect a later rate cut. “The RBA basically said it’s too early to cut rates. While I am a bit more optimistic than the board, unless we see much lower underlying inflation in December, they will likely wait until May for any rate reduction,” he said. ANZ head of Australian economics, Adam Boyton, agreed with Dr. Oliver, pointing to the hawkish nature of RBA governor Michele Bullock’s recent comments. “With the board still focused on the level of demand exceeding supply, our forecast for six-month annualised trimmed mean inflation to fall just within the RBA’s target band by the February meeting no longer seems enough,” Mr. Boyton said. Three of the big four banks traded lower due to the unlikely rate cuts, adding more pressure on mortgage holders to repay their loans.

 

NAB fell 1.09 per cent and was the worst of the big four, while ANZ fell 1.05 per cent. Westpac slid 0.12 per cent while Commonwealth Bank overcame falls in the morning trading to close flat at $158.58. The price of iron ore rose during trading by 1.6 per cent to three-week highs of around $US104.70 a tonne.

 

This was positive for Australia’s iron ore miners with Fortescue Metals lifting 1.55 per cent to $18.99. BHP rose 1.25 per cent while Rio Tinto grew 0.94 per cent. Dr. Oliver said the price of iron ore has been trading in a range of $90 to $110, depending on how the Chinese government stimulates the economy. “There is speculation of more China stimulus, which now appears to be not as good as the market was hoping, but not so bad either, which is why the iron ore price has kept half of its gains. “The problem is any Chinese stimulus will be designed to counter Donald Trump’s stimulus package. It won’t have the same positive impact on commodities as it did in the past. Many past stimulus measures were based on infrastructure spending. Now, you could argue they have already done that and will focus on stimulating consumer spending,” Dr. Oliver said.

 

Travel stock Webjet was the best performing stock on the ASX 200, up 4.88 per cent, while Megaport Limited grew 3.67 per cent. Healthcare was dragged down as CSL fell 1 per cent, but Pro Medicus rose 1.5 per cent to a new high after its Trinity Health contract win this week. Telix Pharmaceuticals and Sigma Healthcare also grew 4.03 and 3.95 per cent respectively.

 

★B2 Level Summary

Australian Sharemarket Update

The Australian sharemarket fell slightly from its recent high on Thursday due to lower expectations for a rate cut in early 2025.

• The ASX200 index dropped 8.1 points (0.10%) to close at 8436 points.
• The All Ordinaries index fell 0.90 points (0.01%) to settle at 8,699.10 points.
• The Australian dollar ended slightly higher at 65.07 US cents.

Market Performance:

• Seven out of 11 sectors traded lower.
• Gains in materials and IT sectors were balanced out by losses in real estate, industrials, and healthcare.
• Trading volume was light because of the US Thanksgiving holiday.

Expert Opinions:

• Shane Oliver, the chief economist at AMP, said financial markets now expect a later rate cut.
• Adam Boyton, ANZ's head of Australian economics, agreed with Oliver, noting recent comments from RBA governor Michele Bullock.

Bank and Commodity Movements:

• Three of the big four banks traded lower due to the unlikely rate cuts, adding pressure on mortgage holders.
  • NAB: Fell 1.09%
  • ANZ: Fell 1.05%
  • Westpac: Fell 0.12%
  • Commonwealth Bank: Closed flat at $158.58
• Iron ore prices rose by 1.6% to a three-week high of about $US104.70 per tonne, benefiting Australian iron ore miners.

Company Highlights:

• Fortescue Metals: Rose 1.55% to $18.99.
• BHP: Rose 1.25%.
• Rio Tinto: Grew 0.94%.

Travel and Healthcare Stocks:

• Webjet: Was the best-performing stock on the ASX 200, up 4.88%.
• Megaport Limited: Grew 3.67%.
• Pro Medicus: Rose 1.5% to a new high.
• Telix Pharmaceuticals and Sigma Healthcare: Grew 4.03% and 3.95% respectively.