Aussie shares are slipping from record highs following solid jobs data which has reduced the market’s expectations of a February rate cut. The ASX 200 is down 50pts or 0.7 per cent to 7,082.2. Keep in mind that the Australian market hit its seventh fresh record high of the year yesterday and as of Wednesday was having its best month in more than eight years.
The latest employment figures at 11:30am AEDT todaywere generally above most economist expectations. Employment rose by 28,900 in December (close to three times above consensus) while the jobless rate eased from 5.2 per cent to 5.1 per cent. Despite all of the job gains being part-time positions, the ASX 200 worsened following the data while the Australian dollar strengthened. The market is now pricing in a ~24 per cent of a rate cut next month (pricing was ~57 per cent pre-data).
While the losses are quite broad across the market today, there are a handful of stocks and sectors doing most of the damage. Energy and mining companies are falling quite heavily with the oil price slumping by 3 per cent last night. Comments from the head of the International Energy Agency suggests he expects the global oil market to be in surplus for the time being. Losses from CIMIC (CIM) and Downer EDI (DOW) have been substantial weights on the local market this morning.
CIMIC (CIM) is slumping by 19 per cent after announcing plans to exit operations in the Middle East to better focus on the region. The construction group warned this decision will impact results by around $1.8bn and it will not pay investors a final dividend (for the first time since 2011).
Downer EDI (DOW) is down 21 per cent after the engineering group cut its profit expectations by $65m for the year. DOW now expects to make around $300m in earnings due to higher costs and loss making construction projects.
Airlines, travel agents and airport stocks are mostly higher following tumbles on Wednesday. Concerns of a global outbreak of the coronavirus pushed stocks like Flight Centre (FLT), Sydney Airport (SYD) and Webjet (WEB) lower yesterday.
1.1bn shares have changed hands so far today worth $2.5bn. 410 stocks are up, 558 are down and 354 remain unchanged.
Published by CommSec