ASX dips amid spectre of extended US rate rises

By Emma Koehn
Updated

Here’s your five-minute wrap of the trading day and how the experts saw it.

The numbers: The S&P/ASX 200 dragged throughout Tuesday’s session to finish 0.3 per cent lower at 7131 points. It was the index’s first loss in four sessions.

Wall Street was trading flat ahead of its close later this morning Australian time.
Wall Street was trading flat ahead of its close later this morning Australian time.Credit:AP

The lifters: Winners were few and far between but included ResMed, up 1.7 per cent to $30.57, Coles, which gained 0.4 per cent to $16.58, and REA Group, which finished the day ahead 1.4 per cent at $112.83.

The laggards: The nation’s largest companies were a weight throughout the session, with BHP finishing down 0.4 per cent to $47.80 and CSL losing 0.5 per cent to $275.63. Energy and mining stocks deepened their losses throughout the day, with Santos down 0.8 per cent to $7.05 while New Crest Mining lost 2.3 per cent to close at $22.27.

The lowdown: The Australian bourse had a tentative start to the session then widened its losses as the market digested speculation that US interest rates may continue to rise and stay elevated into next year.

Investors across the globe remained cautious about the interest rates outlook ahead of a speech by Federal Reserve chair Jerome Powell on Tuesday that is set to provide insights into how the US central bank will manage rate rises this year.

A Wall Street rally fizzled on Monday after Federal Reserve officials alluded to the prospect of continued rate rises in 2023.

Australian consumer stocks showed some of the few signs of life late in the day as discretionary stocks such as Domino’s Pizza Enterprises posted gains and Roy Morgan-ANZ consumer confidence data suggested Australians were starting the year on an optimistic note.

Despite this, ANZ senior economist Adelaide Timbrell noted confidence figures were still below the long-term average.

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“Household inflation expectations eased significant by 0.9 percentage points from the last print of 2022, suggesting cautious optimism about lower inflation through 2023,” she said.

National spending data from the Australian Bureau of Statistics also showed spending continued to boom in the 12 months to November of last year, but growth slowed overall. Spending on home equipment, however, dropped significantly compared with post-lockdown booms in 2021.

Mining stocks lagged throughout the session and the materials, energy and industrials sectors had each lost more than 0.4 per cent by late afternoon trading. The Albanese government revealed details of its climate policy on Tuesday afternoon, confirming the nation’s biggest industrial polluters will face binding emissions targets for the first time from July 1.

Whitehaven Coal finished the session down 1.2 per cent to $9.07, Rio ended 0.5 per cent lower at $118.23, and Transurban lost 0.4 per cent to $13.25.

The Australian dollar stayed above the US 69 cent mark throughout the session and was US69.04 cents just after the market close.

Tweet of the day:

Quote of the day:

“The safeguard mechanism is a crucial tool in Australia’s ability to accelerate the decarbonisation of the economy while remaining internationally competitive and the government is right to ensure it works as effectively and as simply as possible.” – Business Council of Australia on the Albanese government’s climate reforms.

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Source: Thanks smh.com