Oz mar­ket marches to its own drum­mer

The West Australian - - WEST BUSINESS -

The Aus­tralian share­mar­ket failed to fol­low the firmer lead from Wall Street on Wed­nes­day as rising global bor­row­ing costs and weak­en­ing jobs growth sapped bullish sen­ti­ment.

The S&P-ASX 200 index fell 12.7 points, or 0.21 per cent, to 6094.3 with in­dus­tri­als lead­ing losses as weak wages, slow­ing jobs growth and rising fuel prices sig­nalled in­ten­si­fy­ing do­mes­tic growth head­winds.

“It’s pretty clear that the Aus­tralian mar­ket at the mo­ment is march­ing to its own drum­mer and that’s fur­ther re­in­forced by the di­ver­gence with some of the other mar­kets in the re­gion,” CMC Mar­kets chief mar­ket strate­gist Michael Mc­Carthy said.

Head­line jobs data showed a 22,600 in­crease in new jobs, but the num­bers for April were re­vised down by more than 5000 and March’s block­buster 65,000 surge in full­time jobs fell to 20,000.

“The labour mar­ket was al­ways set to cool af­ter such a strong 2017,” BIS Ox­ford Eco­nom­ics head of macro­eco­nomics Sarah Hunter said.

“But such a sharp slow­down is an in­di­ca­tion that jobs growth jumped the gun on out­put growth last year.”

De­spite the jobs data prov­ing to be an­other hur­dle for fu­ture rate rises, gov­ern­ment 10-year bond yields rose 2.2 points to 2.904 per cent af­ter global bench­mark US 10years rose 3 points to 3.10 per cent last night, the high­est level in al­most six years.

The Aus­tralian dol­lar firmed US0.5¢ to US75.30¢ as com­mod­ity prices rose overnight. “It’s tempt­ing to at­tribute the dol­lar’s come­back to re­ports yes­ter­day that the Kaza­khstan cen­tral bank has in­creased its re­serve al­lo­ca­tion to Aus­tralian dol­lars from 5 per cent to 8 per cent, but for a cen­tral bank with barely $4 bil­lion worth of re­serves the flows in­volved would barely have touched the sides of the FX mar­ket,” Na­tional Aus­tralia Bank global head of cur­rency strat­egy Ray At­trill said.

Spot iron ore rose 1.1 per cent to $US68 a tonne, while Brent crude oil jumped 2 per cent to $US78.40 a barrel and cop­per firmed 0.3 per cent to $US6826 a tonne.

Rio Tinto jumped $2.07 to

$86.75, BHP climbed 43¢ to $34.44 and South32 gained 6¢ to $4.03.

Global in­vestors were also ner­vously eye­ing po­lit­i­cal risk in Italy and the eu­ro­zone.

“The untested young lead­ers of anti-es­tab­lish­ment pop­ulist par­ties in coali­tion talks to gov­ern Italy have ar­gued for free­dom from the rules of the eu­ro­zone mone­tary union,” Am­pGFX strate­gist Greg Gibbs said.

“Ital­ian bond yields rose 16 ba­sis points on Wed­nes­day, with some con­ta­gion to other pe­riph­ery gov­ern­ment bond mar­kets and Euro­pean bank stocks.”

West­pac tum­bled $1.11 to

$29.10 af­ter go­ing ex­div­i­dend 94¢, while ANZ climbed 22¢ to $27.99, Com­mon­wealth Bank rose 37¢ to $71.16 and Na­tional Aus­tralia Bank gained 8¢ to

$27.60.

Tel­stra added 1¢ to $2.87 and AMP firmed 2¢ to $3.93.

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