Australian Market Significantly Lower

The Australian stock market is significantly lower after being in the green most of the morning session on Thursday, extending the losses in the previous three sessions, with the benchmark S&P/ASX 200 falling below the 6,900 level, following the mixed cues overnight from Wall Street, as weakness in gold miners and technology stocks were partially offset by gains in energy and financial stocks.

Traders are also reacting to the hawkish comments from the US Federal Reserve, which indicated that it plans to begin raising interest rates "soon," citing elevated inflation and a strong labor market.

Trades remain concerned about the sharp spike in domestic new coronavirus infections, though off record highs. New South Wales records 17,316 new cases and 29 deaths on Wednesday. Victoria reported 13,755 new cases and 15 deaths, Queensland recorded 11,600 new cases and 15 deaths, Tasmania reported 726 new cases, South Australia reported 1,953 new cases, and ACT reported 884 new cases.

The benchmark S&P/ASX 200 Index is losing 72.40 points or 1.04 percent to 6,889.20, after hitting a low of 6,887.40 and a high of 7,042.80 earlier. The broader All Ordinaries Index is down 73.70 points or 1.02 percent to 7,174.40. Australian markets ended sharply lower on Tuesday.

Among major miners, BHP Group and Rio Tinto are gaining almost 3 percent each, while Fortescue Metals is advancing almost 1 percent. OZ Minerals is edging down 0.3 percent and Mineral Resources is plunging more than 5 percent.

Oil stocks are higher. Woodside Petroleum is gaining more than 4 percent, Origin Energy is adding almost 2 percent, Beach Energy is surging almost 10 percent and Santos is advancing almost 4 percent.

Among the big four banks, Commonwealth Bank is edging up 0.2 percent, National Australia Bank is adding almost 1 percent, ANZ Banking is up more than 2 percent and Westpac is advancing more than 1 percent.

In the tech space, Xero is losing almost 5 percent, WiseTech Global is plunging more than 7 percent and Zip is declining more than 5 percent. Appen is edging up 0.2 percent.

Gold miners are weak as gold prices tumbled overnight. Newcrest Mining is losing more than 2 percent, Resolute Mining is declining more than 4 percent, Northern Star Resources is slipping almost 5 percent, Evolution Mining is plunging more than 9 percent and Gold Road Resources is down almost 1 percent.

In economic news, Export prices in Australia were up 3.5 percent on quarter in the fourth quarter of 2021, the Australian Bureau of Statistics said on Thursday, slowing from 6.2 percent in the three months prior. On a yearly basis, export prices skyrocketed 38.3 percent. Import prices rose 5.8 percent on quarter, up from 5.4 percent in the previous three months. They were up 13.8 percent on year.

In the currency market, the Aussie dollar is trading at $0.709 on Thursday.

On Wall Street, stocks were mostly higher for much of the trading session on Wednesday but came under pressure in reaction to the Federal Reserve's highly anticipated monetary policy announcement. The major averages all moved to the downside, although the Nasdaq managed to creep back above the unchanged line.

After surging as much as 3.4 percent, the tech-heavy Nasdaq pulled back well off its best levels but still inched up 2.82 points or less than a tenth of a percent to 13,542.12. Meanwhile, the Dow fell 129.64 points or 0.4 percent to 34,168.09 and the S&P 500 dipped 6.52 points or 0.2 percent to 4,349.93.

Meanwhile, the major European markets all moved sharply higher on the day. While the U.K.'s FTSE 100 Index jumped by 1.3 percent, the French CAC 40 Index and the German DAX Index surged up by 2.1 percent and 2.2 percent, respectively.

Crude oil futures settled higher on Wednesday as prices climbed amid rising geopolitical tensions. U.S. President Joe Biden has warned Moscow of damaging sanctions, including measures personally targeting President Vladmir Putin, if Russia invades Ukraine. West Texas Intermediate Crude oil futures for March ended higher by $1.75 or 2 percent at $87.35 a barrel, the highest settlement since October 2014.

For comments and feedback contact: editorial@rttnews.com

Market Analysis

Follow RTT