ASX200 falls despite a trio of strong economic updates

A trio of stronger than expected economic data was not enough to stop Australia’s share market trading heavily in the red on Thursday.

Energy and utilities stocks were a major drag on the ASX during Thursday’s trading as the price of commodities dropped following trade tensions.

The benchmark ASX200 index hit a fresh 10-week low, as it fell 46.40 points or 0.57 per cent to 8,094.70.

The broader All Ordinaries fell 36.70 points or 0.44 per cent to 8,326.40.

The Australian dollar firmed 0.1 per cent and is now buying 63.38 US cents.

The ASX fell despite stronger than expected economic news. Picture Newswire/ Gaye Gerard.

In a broad based market fall, eight of the 11 sectors ended in the red, led by energy and utilities stocks down 2.99 and 1.76 per cent respectively.

Energy stocks were once again hammered on Thursday, reaching their lowest level since January 2022, as crude oil struggles with a mix of tariffs, US growth concerns, the potential lifting of US sanctions on Russia, and OPEC+ opting to increase its output.

Major oil producer Woodside fell 4.73 per cent to $22.98, although was trading ex-dividend, while AGL slumped 4.08 per cent to $10.11, Ampol traded down 1.83 per cent to $24.66 and Santos fell 1.92 per cent to $6.13.

Australia’s market fell despite a strong lead in from Wall Street overnight on Wednesday with the S&P 500 rising 1.12 per cent to 5,842.63 while the tech heavy Nasdaq bounced 1.46 per cent to 18,552.73.

The US market responded strongly in part to US tariffs on Mexican and Canadian automakers being delayed.

Over in China, the National People’s Congress said the second largest economy will set a 5 per cent GDP growth target as well as a fiscal stimulus package led by the government widening the budget deficit to 4 per cent of GDP, its highest level in 30 years.

VanEck Australia portfolio manager Cameron McCormack said China was pressing ahead with policies aimed at boosting the Chinese economy but it could be bad news for the Australian market in the short-term.

Australia’s sharemarket had eight of the 11 sectors trading in the red. Picture: NewsWire / Max Mason-Hubers

“China has also announced plans to reduce its steel output in order to address overcapacity and stabilise prices, which is a short-term headwind for Australian iron ore exporters,” he said.

The major miners all fell on Thursday, with the iron ore price trading at $US101.20 per tonne.

BHP fell 0.78 per cent to $39.23 while Rio Tinto dragged 2.20 per cent to $114.92. Fortescue offset this trend up 1.13 per cent to $16.11.

Despite the news out of China, Rio Tinto said it is investing a further $US1.8bn ($2.84bn) to develop the Brockman Syncline iron ore operation.

While the miners were trading in the red, Mr McCormack said it could be short-term pain for longer term gains for Australia.

“However, as China diversifies its trade relationships within the APAC region and shifts import demand toward higher-value industries like technology, advanced manufacturing, and infrastructure, this could see longer term opportunities emerge for regional economies, including Australia, to align with this transition,” Mr McCormack said.

Additionally, Germany said it would spend in excess of $1 trillion euros to lift its economy. In Australia, Wednesday’s quarter four GDP suggests growth has passed its low point and the Australian economy can reach the RBA’s growth forecast of 2.1 per cent in 2025.

Australia’s insurance sector was also caught up in the market sell-off as investors feared the impacts of cyclone Alfred which is likely to hit Southeast Queensland and Northern NSW sometime between Friday night and Saturday morning.

Shares in IAG dropped 0.38 per cent to $7.80, while QBE fell 1.3 per cent to $20.84 while Suncorp Group dropped 1.04 per cent to $19.11.

Originally published as ASX200 falls despite a trio of strong economic updates