By Millie Muroi
Welcome to your five-minute recap of the trading day, and how experts saw it.
The Australian sharemarket was bolstered by the Reserve Bank’s interest rate pause this afternoon, but closed slightly lower as energy and utilities companies slipped. Qantas Airways bounced after announcing its CEO Alan Joyce was stepping down immediately.
The S&P/ASX 200 was down 4.5 points, or 0.06 per cent, to 7314.3 at the close as consumer staples, healthcare and industrials traded firmly in the green. The local bourse lacked direction overnight from Wall Street, which was closed for America’s Labor Day holiday.
Qantas shares rose in early trade on the news Joyce stepped down from his post after 15 years, two months earlier than originally scheduled, but ended the session 0.2 per cent lower as investors and shareholder advisers said this early exit may not be enough to quell the disquiet around the company. The airline had a horror month that culminated in allegations of improper government influence, anticompetitive practices and the alleged sale of tickets for flights already cancelled.
Meanwhile, the market was reassured by the RBA’s decision to keep interest rates on hold, with the sharemarket paring back its early losses after the announcement at 2.30pm AEST.
Healthcare companies (up 0.8 per cent) was the strongest sector as shares in CSL (up 0.9 per cent), Sonic (up 0.8 per cent) and Ramsay (up 1.1 per cent) all advanced.
Consumer staples (up 0.4 per cent) also helped to bolster the index as supermarket giants Coles and Woolworths gained 0.5 per cent and 0.3 per cent, respectively, and Endeavour added 0.6 per cent.
Lithium miner IGO (up 2.4 per cent) was stronger, along with Auckland International Airport (up 1.4 per cent) and Computershare (up 1.3 per cent).
Coal miner Yancoal (down 8.9 per cent) was the biggest large-cap decliner amid a 0.6 per cent fall in the energy sector more broadly. Woodside (down 0.6 per cent) Whitehaven (down 1.1 per cent) were also weaker.
Miners (down 1.2 per cent) were among the weakest companies on the index with gold and iron ore miners dropping. Gold miners Northern Star (down 3.7 per cent) and Evolution (down 2.5 per cent) both slipped. Iron ore miner Fortescue fell 0.7 per cent and lithium miner Liontown declined 2.5 per cent.
IG Australia market analyst Tony Sycamore said the local bourse slid lower despite the Reserve Bank’s decision to keep interest rates on hold for a third consecutive month, as optimism around easing measures in China faded.
While recent data had fallen the way the RBA would have hoped, the central bank retained a tightening bias and miners slipped lower on uncertainty about China, he observed. The share price of Fortescue in particular continued to flounder, Sycamore said, after losing a third high-profile board member last week.
Qantas’ CEO Alan Joyce’s early departure was the big corporate news of the day. “Joyce’s position had become untenable, and his departure was a prerequisite to end the latest drama before the airline could restore its battered image among policymakers, regulators, shareholders, and customers,” Sycamore said, adding that the market “might be looking for the scalp of a board member before it is appeased.”
In overseas markets, European shares ceded earlier gains in low-volume trading overnight as some of the optimism around China’s property market stimulus ebbed.
Europe’s Stoxx 600 gauge closed little-changed after rising as much as 0.8 per cent earlier. The consumer, travel and leisure and mining shares — sectors with exposure to China — advanced.
With Wall Street shuttered, European trading volumes were below their thirty-day average by almost a third, according to data compiled by Bloomberg. Danish drugmaker Novo Nordisk, maker of blockbuster weight loss drug Ozempic, rose to a new record high, having just become Europe’s most valuable firm. Carmaker Mercedes Benz Group added 1 per cent after unveiling a new, longer-range electric vehicle.
Expectations of crude supply cuts from the OPEC+ group kept oil futures near nine-month highs.
Markets got a boost from a US jobs report on Friday that showed a steadily cooling US labour market, offering the Federal Reserve room to pause rate increases this month. Sentiment improved further after news of a weekend surge in home sales in two of China’s biggest cities, an early sign that government efforts to cushion a record housing slowdown is helping.
Shanghai and Beijing are seen benefiting the most from authorities’ announcement on Thursday that lowered down-payment thresholds across the nation. The Hang Seng index jumped more than 3 per cent on Monday before paring gains, while a Bloomberg gauge of Chinese developers jumped as much as 8.7 per cent.
“We have been looking for more significant property rescue measures for some time to shore up sentiment and consumer confidence,” UBS Global Wealth Management chief investment officer Mark Haefele said. “This now appears to be materialising in a more convincing way.”
WTI crude oil was up about 0.5 per cent at $US85.9 per barrel after surging last week on Russia’s announcement that it will extend export curbs. Saudi Arabia — which along with Moscow sets the tone at the OPEC+ alliance — is widely expected by traders to follow suit by pushing its voluntary curbs into October.
Some investors are convinced the Fed won’t hike rates further this cycle, bets that were reinforced after last week’s jobs data. At the same time, this year’s US stock market rally is strong enough to withstand another leg higher for bond yields, according to the latest Markets Live Pulse survey.
“The incoming data supports our view of a ‘softish’ landing for the US economy,” Haefele said.
While Treasury markets were closed, bond yields inched higher in the eurozone, with rate-setters seemingly divided on whether policy needs to be tightened further this month, given above-forecast inflation and sluggish growth. In a speech in London, European Central Bank President Christine Lagarde avoided signalling whether policymakers will raise or hold interest rates next week.
Tweet of the day
Quote of the day
“In the last few weeks, the focus on Qantas and events of the past make it clear to me that the company needs to move ahead with its renewal as a priority,” said Qantas boss Alan Joyce as he stepped down from his role.
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Source: Thanks smh.com