By Emma Koehn
Australian shares eased into Friday with minor gains as consumer and tech stocks trended upwards as the nation’s festive spending kicked off in earnest.
The S&P/ASX200 index was 0.1 per cent stronger at 10:10am AEDT, climbing to 7,252. Energy and material stocks were the only laggards, with all other subsectors in the green in the first 15 minutes of trading.
Consumer staples and discretionary stocks took the lead early as Black Friday sales commenced across the country. Harvey Norman started the session 1.4 per cent stronger to $4.23, while JB Hi-Fi was up 1.2 per cent to $44.48 and retail giant Wesfarmers gained 0.6 per cent to $49.13.
The tech sector also powered forward, led by jobs platform Seek which gained 1 per cent at the open to $21.69.
Mining and energy stocks were the major drag on the bourse in early trading, with BHP losing 0.5 per cent to $44.33. Santos was 0.5 per cent lower to $7.36.
The Australian dollar soared overnight as the US dollar weakened as currency markets responded to meeting minutes from the Federal Reserve which suggested support for more moderate rate hikes. Aussie dollar dipped slightly at the market open but was sitting at 67.6 US cents just before 10:30am.
European stocks gained and the US dollar continued to fall overnight on the back of Federal Reserve meeting minutes that showed support for more moderate interest-rate increases.
The Stoxx Europe 600 Index extended its recent rally as the real estate sector outperformed, boosted by the prospects of slower rate hikes and analyst upgrades. An index of global stocks advanced for a third day.
European bonds rallied as traders trimmed wagers on rate increases by the European Central Bank, with risk-sensitive Italian debt leading the gains. There is no trading in Treasuries due to the US holiday.
Minutes from the Fed gathering earlier this month indicated several officials backed the need to moderate the pace of rate hikes, even as some underscored the case for a higher terminal rate. This adds weight to expectations the central bank will raise rates by 50 basis points next month, ending a run of jumbo 75 basis point increases.
“It was the start of a more different and dovish narrative from the Fed,” said Sunaina Sinha Haldea, global head of private capital advisory at Raymond James. “Is it a pivot? No, but are we seeing a slowdown in rate hikes and that path downwards towards rate cuts coming through? Yes. I think we will look back and say this was the peak of it.”
“A few” ECB officials favoured a smaller increase in interest rates in October to tackle record inflation, an account of their last meeting showed. Those who preferred a less aggressive step cited the fact that the hike was accompanied by other monetary-tightening measures, according to the account, published on Thursday.
Oil slipped as the European Union considered a higher-than-expected price cap on Russian crude and signs of a global slowdown increased.
Meanwhile, Bank of America said its private clients are flocking to bonds and out of stocks amid fears of a looming recession. Bond funds attracted inflows for a 39th straight week, strategists led by Michael Hartnett wrote in a note. The strategists favour holding bonds in the first half of 2023, with stocks becoming more attractive in the last six months of next year.
“We stay bearish risk assets in the first half, set to turn bullish in the second half as narrative shifts from inflation and rate ‘shocks’ of 2022 to recession and credit ‘shocks’ in the first half 2023,” the strategists wrote.
Gold rose for a third day on the Fed minutes. The precious metal has been hurt by the US central bank’s aggressive monetary-tightening policy to curb inflation, which has pushed up bond yields and the dollar and in turn sent bullion tumbling about 16 per cent from its March peak.
Source: Thanks smh.com