The Australian share market eased for a second day, with the ASX 200 giving up this morning’s gains to slide by 5 pts or 0.07 per cent to 7476.7. Despite the losses, January was the best start to a year in close to four decades (1986), with markets encouraged by the reopening of China’s economy together with hopes inflation has peaked.
The ASX 200 rose by 6.22 per cent in January and by 6.43 per cent for the broader All Ordinaries index. Our market has rallied for four consecutive weeks and recouped all of December’s declines.
Locally on Tuesday, mining stocks, tech companies and property trusts were hit hardest. While BHP Group (BHP), Rio Tinto (RIO) and Fortescue (FMG) all rose, most stocks across the sector came under pressure. Lithium miners fell heavily, including Allkem (AKE) which slumped 7.5 per cent, Lake Resources (LKE) (-6.9 per cent), Novonix (NVX) (-6.2 per cent) and Liontown (LTR) (-5.7 per cent).
Tech company Megaport (MP1) slumped by 24 per cent after delivering a quarterly update which fell shy of some analyst expectations. Insurance stocks were mixed after slumping on Monday as the number of claims relating to New Zealand floods continue to rise.
Retail trade slumped by a much worse than expected 3.9 per cent in December (consensus -0.2 per cent). Declines were significant across all categories with the exception of spending at cafes, restaurants and food delivery. This highlighted signs that consumer spending is softening following eight straight rate hikes in 2022 and the higher cost of living.
Top Australian Brokers
Woolworths (WOW) rose by 3.8 per cent while rival Coles (COL) also improved after a broker said a more challenging 2023 could favour retailers of essential goods.
Flight Centre (FLT) announced the acquisition of a UK-based luxury travel brands called Scott Dunn for roughly A$211m. It expects the acquisition to provide an entry point into the UK and US luxury travel market and it’s in the process of raising A$180m to help pay for the acquisition.
3.5bn shares changed hands worth $8bn. 524 stocks rose, 846 fell and 425 finished unchanged.
Tonight, Exxon, GM, Pfizer, Caterpillar and McDonald’s are expected to post earnings.
Looking forward the market expects interest rates to be raised by between 25 – 50 basis points by the US Federal Reserve, the UK’s Bank of England and the European Central Bank on Thursday.
Originally published by Steven Daghlian – Market Analyst (Author), CommSec