Aussie shares give up gains after strong jobs report

[Pelican Press 0]

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Aussie shares give up gains after strong jobs report

The local share market has given up its early gains to trade flat after a stronger-than-expected domestic labour market report dimmed chances for quick interest rate cuts.

At noon AEDT on Thursday, the benchmark S&P/ASX200 index was up three-tenths of a point at 8,353.9, while the broader All Ordinaries had gained 1.9 points at 8,613.

The ASX200 had been up by as much as 0.3 per cent but plunged 25 points in the space of two minutes after the *********** Bureau of Statistics released the jobs report for November.

Employment rose by 36,000 – 10,000 more than economists’ consensus estimate – while the number of unemployed fell by 27,000, resulting in the unemployment rate falling from 4.1 per cent to 3.9 per cent.

Betashares chief economist David Bassanese called it a “blockbuster” labour market report that meant an interest rate cut in February was off the table unless the fourth-quarter inflation readout comes in very low, which Mr Bassanese said seemed unlikely.

IG analyst Tony Sycamore was more sanguine, saying the numbers were a hit to the chances of a February cut, the situation remained in balance after last week’s soft gross domestic product figures and Tuesday’s dovish commentary from the Reserve Bank.

The rates market was still giving nearly a 50 per cent chance for a February cut, although that’s down from 63 per cent before its release, Mr Sycamore said.

Six of the ASX’s 11 sectors were higher, four were lower and consumer staples was flat.

The industrial sector was the biggest mover, dropping 1.3 per cent after the *********** Competition and Consumer Commission said it would file price-fixing charges against subsidiaries of Downer EDI and Ventia Services Group.

The ACCC alleges the companies engaged in cartel conduct to control prices related to billion-dollar contracts to provide services to over 200 *********** Defence Force bases.

Downer’s Spotless Facility Services subsidiary said it would vigorously defend the charges, while Ventia was reviewing them.

Downer shares had dropped 8.1 per cent to a three-month low, while Ventia stock had plunged 21.4 per cent to a 10-month low.

In the mining sector, Syrah Resources was also having a dismal day, plummeting 28.3 per cent to a more than decade-low of 19c after the graphite producer declared force majeure at its Balama graphite mine in Mozambique, an East African country racked by civil unrest since a disputed election in October.

Elsewhere in the sector, BHP was down 0.4 per cent, Forescue had dipped 0.1 per cent while Rio Tinto had added 0.3 per cent.

In the consumer discretionary sector, Peter Warren Automotive had slumped 12.8 per cent and Eagers Automotive had dropped 8.0 per cent after Peter Warren said it expects to make a first-half profit of just $6 million to $8 million, after turning a $56.8 million full-year profit 2023/24.

Australia is experiencing a significant oversupply of new vehicles, while cost-of-living pressures means there’s less demand than last year, Peter Warren said, adding that it is “aggressively” cutting costs in response.

In the financial sector, the big four banks were having a quiet day, with CBA and NAB flat and Westpac and ANZ both down 0.1 per cent.

The *********** dollar jumped to a two-day high after the jobs report, buying 64.09 US cents, from 63.72 US cents at Wednesday’s ASX close.

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