The Australian share market’s five-day winning streak (longest in six months) came to an abrupt end due to hotter
than expected inflation, with the ASX 200 slipping by 22.1 pts or 0.3 per cent to 7468.3. It was a tentative start to
trade, with the market running on the spot for the opening 90 minutes of the session, before declining once the
December quarter Consumer Price Index (CPI) was released at 11:30am AEDT.
Inflation hit a new 32-year high in the December quarter, topping economist expectations, with headline CPI lifting
by 1.9 per cent between October and December, to be up 7.8 per cent on the year. This has made it likely the
Reserve Bank will opt for another 25 basis point rate hike on 7 February when it meets next.
Keep in mind that this follows the ASX 200 hitting a 9- month high on Tuesday, and getting to within 1.9 per cent
of an all-time high. The local share market has improved by roughly 6 per cent in January so far.
Technology stocks – an interest rate sensitive area of the market – fell most, sliding by 1.2 per cent following today’s
hotter CPI read. Property trusts also declined, while financials (including banks) rose.
News Corp (NWS) was the strongest improver on the ASX 200, lifting by 6.25 per cent after news broke that Rupert
Murdoch has withdrawn his proposal to explore a potential merger of News Corp and FOX.
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Woodside (WDS) slipped by 1.2 per cent after oil prices declined and the energy giant handed down its quarterly
update. While it delivered record quarterly production of 51.6MMboe (up 0.7 per cent from Q3), revenue fell by 12
per cent to $5,160m, due to lower oil prices.
Newcrest (NCM) fell 1.9 per cent after the country’s biggest gold miner confirmed it’s on track to deliver on its annual guidance. Output declined in the prior quarter partly due to drought near its PNG mines.
3.4bn shares were traded on Wednesday, worth $7.3bn. 614 stocks rose, 745 fell and 418 finished unchanged.
US electric vehicle firm Tesla is set to post its earnings tonight, together with IBM, AT&T, ADP and Boeing.
The Australian share market will shut on Thursday for the Australia Day holiday. Normal trade will resume on Friday.
Originally published by Steven Daghlian – Market Analyst (Author), CommSec
