Hit by a higher Australian dollar and the reduced likelihood of a further interest rate cut from the Reserve Bank of Australia (RBA) early next year, the local sharemarket couldn’t sustain an early rally on Thursday, finishing trade near its session lows.
The benchmark S&P/ASX 200 slipped 18.3 points, or 0.3 per cent, to 6833.1, weighed down by weakness in healthcare, energy, finance, telecommunications and consumer discretionary stocks.
Having gained as much as 0.3 per cent earlier in the session, the benchmark began its descent lower after the release of Australia’s latest jobs report which revealed unemployment fell to 5.2 per cent in November thanks to a surge in part-time hiring.
The better-than-expected data helped slash the odds of another 25 basis point rate cut from the RBA in February from above 60 per cent to 45 per cent, which in turn helped boost the value of the Australian dollar and government bond yields.
“This move in rates markets knocked the wind out of the index today,” IG Markets analyst Kyle Rodda said.
Demonstrating the impact the jobs report had on the local market, Thursday’s session high occurred moments before it’s release.
By individual stock, infrastructure supplier Service Stream was the standout performer, surging 11.1 per cent to $2.71 after announcing one of its subsidiaries had been awarded a 10-year contract with Sydney Water as part of a consortium deal.
Gold miner Northern Star Resources also enjoyed a strong day, gaining 4.7 per cent to $10.44 following price target upgrades from analysts at Ord Minnett and J.P. Morgan.
At the other end of the scoreboard, online lottery retailer Jumbo Interactive slumped 5 per cent to $18.41. Oil and gas explorer Beach Energy sank 4.8 per cent to $2.56 on news it had acquired a part interest in an exploration site off the New Zealand coastline.
Across the broader index, 89 stocks closed higher, 97 lower while 14 were unchanged.
Source: Thanks smh.com