The Australian sharemarket again followed the lead of Wall Street and ended lower on Friday. The S&P/ASX 200 index fell by 57 points or 0.8%. The All Ordinaries index fell by 65 points or 0.8%.
Over the week the ASX200 fell by 1.6% – the first fall in six weeks.
In overseas markets on Thursday, key US indexes were weaker with the Dow Jones down 0.7%, the S&P 500 lower by 0.9% and the Nasdaq was weaker by 1.1%. But there were again gains in Europe with the European FTSEurofirst300 index up by 0.7% and the UK FTSE was up 0.3% to record highs.
In Australia on Friday investors digested the quarterly Statement on Monetary Policy from the Reserve Bank and a handful of earnings results. All but Consumer Staples ended lower. The interest rate-sensitive Information Technology sector fell by 2.0%.
Coal miners fell in on news that Adani had offered several coal shipments at discounted rates. Shares in New Hope (NHC) was down 8.6 per cent and Whitehaven Coal (WHC) fell by 3.7%.
Continuing a trend apparent over the week, share prices of companies reporting earnings results were generally lower. Shares of News Corp (NWS) fell by 6.9% on Friday while shares of the REA Group (REA) fell by 2.7%.
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NWS reported a 70% fall in statutory net income in the six months to December, citing a softer advertising market, higher interest rates and currency fluctuations. In response to falling revenues, NWS said it will cut one-in-20 jobs (or 1,250 staff).
REA reported a 9.6% fall in statutory net profit for the six months to December citing “challenging market environment and very strong prior year comparables”. Higher interest rates and rising costs adversely impact consumer sentiment.
In economic news, the Reserve Bank released the Statement on Monetary Policy. The RBA now expects inflation to be higher for longer, warning that further interest rate increase lay ahead to slow the economy and reduce inflationary pressures.
On Friday, 3.15 billion shares were traded, worth $5.9 billion. Overall 488 stocks rose over the session, while 847 fell and 420 finished unchanged.
In the US on Friday, a report on consumer sentiment data will be released, containing an update on inflation expectations.
Originally published by Craig James – Chief Economist (Author), Commsec