The Business Times

Australia: Shares close flat as two-day rally fizzles out

Published Thu, Oct 6, 2022 · 03:26 PM

Australian shares closed flat on Thursday (Oct 6) after two sessions of sharp gains, as gains in energy stocks on the back of strong crude prices were offset by losses in banks.

The S&P/ASX 200 closed little changed at 6,817.5, also weighed down by recession fears. The index gained 5.6 per cent in the previous two sessions after the country’s central bank delivered a smaller-than-expected interest rate hike.

Hopes of a slowdown or pause in the US Federal Reserve’s tightening pace dwindled after data showed strong labour demand again, weighing on investor sentiment.

“For now, the major theme playing is the macroeconomic landscape, with investors looking closely at the RBA (Reserve Bank of Australia), the Fed, and data on inflation, jobs and wage growth,” said Kunal Sawhney, chief executive officer of Kalkine Group.

Sawhney said the recent rally seen in ASX 200 was “yet to translate into a consistent growth in the value of stocks, which makes this a wait-and-watch game, with little predictability on what is coming next”.

Fund manager Magellan Financial Group was the top loser on the local bourse as the stock slumped 8.4 per cent to an eight-year low on higher outflows in the September quarter.

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Financials declined 0.4 per cent after gaining about 6.6 per cent in the last two sessions. Australia’s “Big Four” banks fell between 0.4 and 1 per cent.

Meanwhile, miners rose 0.6 per cent and hit a three-week high. Sector heavyweights BHP Group and Rio Tinto rose 0.6 per cent and 0.2 per cent, respectively, while Fortescue Metals Group eased 0.1 per cent.

Energy stocks climbed 2.2 per cent, hitting their highest in nearly a month on the back of rising oil prices. The sub-index rose for an eight consecutive session. Woodside Energy and Santos advanced 2.6 per cent and 1.8 per cent, respectively.

In New Zealand, the benchmark S&P/NZX 50 closed 0.5 per cent lower at 11,125.24. Dairy firm a2 Milk was among the top decliners. REUTERS

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