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The Aussie market is softer at lunch on Thursday with the ASX 200 following losses on Wall Street overnight. The local benchmark index is down 22pts or 0.3% to 7,364 having been 45 points weaker at its morning lows. US markets fell following the conclusion of the Federal Reserve meeting where the US central bank now expects to raise interest rates earlier than previously outlined, by late 2023, due to the sharp recovery of the economy.

The Aussie economy is also looking strong with the May jobs data coming in well ahead of expectations. Employment rose by 115,200 compared to consensus of a 30,000 lift. The unemployment rate also dropped from 5.5% to 5.1%, back to February 2020 levels.

Local losses are across a broad range of sectors with energy and materials easily the worst performers. Both sectors are down close to 2% each. Major miners are being weighed by a sharp drop in iron ore prices overnight, falling 3.9% to US$213.65/tonne. Fortescue Metals (FMG) is down 2.5% with Rio Tinto (RIO) also 2% lower while BHP Group (BHP) falls 1.4%. Local energy producers are weaker even as global oil prices rose to fresh 2-year highs.

Financials are mostly helping to minimise further losses with gains for the big four banks. Westpac (WBC) and ANZ Bank (ANZ) are rising most while Commonwealth Bank (CBA) has hit another record high and is trading above $106/share. National Bank (NAB) is slightly lagging behind with a 0.9% improvement.

Coles Group (COL) is weighing on the consumer staples sector with a 4.4% slide as the supermarket chain holds a strategy day with investors. COL is spending $1.4 billion to drive efficiencies for the business in FY22 as it looks to recapture its market share and improve sales from the drop off following the easing of panic buying in early 2020.

Elsewhere, Whitehaven Coal (WHC) is 13% softer having downgrading its coal production guidance for FY21 to 20.4 million tonnes from a previous range of 20.6-21.4 million tonnes. Operations at its Narrabri & Gunnedah sites were the main culprits.

Seven West Media (SWM) shares have climbed 17% after a positive trading update. The media group has seen a strong rebound in advertising revenue in 4Q21, estimated to rise >45% on a year ago. This momentum is also expected to carry into the September quarter. FY21 EBITDA is now expected at $60 million, a gain of 130% the year before.

Published by CommSec