ASX slips as Wall Street wobbles to start December

By Nell Geraets

The Australian sharemarket has opened lower on Friday following an uneven session on Wall Street after a contraction in US manufacturing activity overshadowed data suggesting a key measure of inflation had eased.

The S&P/ASX 200 fell by 0.2 per cent to 7335.8 points at 10.06am AEDT. Despite muted gains in healthcare and IT stocks, the index is weighed down by the materials and real estate sectors, which have both fallen by 0.6 per cent.

Wall Street has made an uncertain start to December.
Wall Street has made an uncertain start to December. Credit:AP

Copper shares are faring well with Evolution Mining lifting by 3.8 per cent to nearly $3.00 and Chalice Mining surging by 4.3 per cent. Gold mining firm Northern Star Resources is 2.4 per cent higher.

Domino’s Pizza Enterprises has edged up by 1.3 per cent to $67.20 following the completion of its $150 million fully underwritten placement of 2.3 million shares at $66.38 per new share.

Warrego Energy soared by 9.6 per cent at market open after Beach Energy increased its bid for the Perth basin gas firm by 25 per cent in an attempt to beat an off-market offer from Gina Rinehart’s Hancock Energy.

All big four banks are down, punctuated by Commonwealth Bank which shed 0.9 per cent. Energy stocks have also slid, with Woodside Energy declining by 1.3 per cent to $36.20 and Santos trading 0.7 per cent lower.

Mining company Whitehaven Coal has dropped by 2.3 per cent to $9.70 and metallurgical coal company Coronado Global Resources has plummeted by 4.3 per cent. BHP and Rio Tinto are both 0.5 per cent lower in early trade.

Overnight, stocks fell in uneven trading on Wall Street and bond yields pulled back after the US government reported that a measure of inflation closely watched by the Federal Reserve eased in October.


The S&P 500 closed 0.1 per cent lower while the Dow Jones fell by 0.5 per cent. The tech-heavy Nasdaq added 0.1 per cent. The ASX hit a seven-month high on Thursday after Jerome Powell sparked a rally on world markets.

Salesforce slumped 8.3 per cent as Bret Taylor said he would resign as co-CEO of the customer-management software developer.

Major indexes are coming off of their second-straight month of gains.

Yields on both short-term and long-term bonds fell. The yield on the 10-year Treasury, which influences mortgage rates, edged lower to 3.56 per cent from 3.61 per cent late on Wednesday.

Investors are reviewing the latest update on inflation. A measure of inflation that is closely monitored by the Fed eased in October. Wall Street has been closely watching any updates about inflation to get a better sense of whether the Fed will tone down its aggressive interest rate increases.

The Fed has raised its benchmark rate six times since March, driving it to a range of 3.75 per cent to 4 per cent, the highest in 15 years. Wall Street expects the benchmark rate to reach a peak range of 5 per cent to 5.25 per cent by the middle of 2023.

A big concern for Wall Street has been whether the Fed can tame rates without sending the economy into a recession as it hits the brakes on economic growth. Businesses are seeing demand fall for a wide range of goods as inflation squeezes wallets and analysts generally expect the US to dip into a recession, even if it is mild and short, at some point in 2023.

“What turns mild recessions into deep economic scarring is the buildup of excess, and we don’t have a bubble this time,” said Katie Nixon, chief investment officer for Northern Trust Wealth Management.

Inflation will continue to be the main focus for Wall Street, and “on that score, things seem to be coming off the boil,” she said.

The closely watched monthly report on the job market will be released on Friday.

with AP

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