ASX slumps as traders await US jobs data; $A hits two-year low

Welcome to your five-minute recap of the trading day.

The numbers

The Australian sharemarket slipped on Friday after the Australian dollar hit a new two-year low, with most sectors falling and shares in embattled casino operator Star continuing to plummet.

The S&P/ASX 200 lost 35.1 points, or 0.4 per cent, to 8294.1 points at close, with mining the only sector in the green. It comes after the local bourse fell by 0.2 per cent on Thursday.

The Australian sharemarket opened flat on Friday after the Australian dollar hit a new two-year low.Credit: Louise Kennerley

The Australian dollar was valued at US61.93¢ as at 4.47pm AEDT, marking a recovery after falling to US61.72¢ overnight, the lowest since October 2022 and behind the previous record low set late last week.

The lifters

Losses on the ASX were limited by growth in the materials sector, which benefited from increased iron ore prices. Giants BHP (up 1 per cent) and Rio Tinto (up 2.2 per cent) grew, as did goldminers Newmont and Northern Star, which added 1.6 per cent and 0.2 per cent respectively. Fortescue gained 0.1 per cent.

Insignia Financial grew 2 per cent, continuing a positive run after adding 14.7 per cent on Monday when it told investors it had received a non-binding $2.9 billion takeover proposal from private equity firm CC Capital Partners.

The laggards

Uranium miners Boss Energy (down 1.5 per cent) and Deep Yellow (down 2 per cent) both fell, losing ground after last week’s rally.

Finance was the worst-performing sector on the bourse, and was led into the red by Commonwealth Bank, the largest stock on the ASX, which fell 1.7 per cent. Westpac (down 1.7 per cent) fell after being downgraded by Morgan Stanley, while NAB (down 1.1 per cent), Macquarie (down 1.2 per cent) and ANZ lost only 0.3 per cent. Insurers QBE (down 0.8 per cent) and Suncorp (down 0.5 per cent) also retreated.

Energy giants Woodside (down 0.5 per cent), Santos (down 0.4 per cent) and Ampol (down 1.2 per cent) fell, as did Origin Energy (down 0.5 per cent).

The Star continued its downward slide from Thursday, losing 15.4 per cent in Friday trading as it battles to survive a cash crunch. It was the worst performing ASX stock on Friday, and comes after Morningstar analyst Angus Hewitt forecast a 50 per cent chance of the company falling into administration.

Woolworths (down 1.2 per cent) and Coles (down 0.6 per cent) both lost, while Kmart and Bunnings owner Wesfarmers (down 0.4 per cent) also fell.

The lowdown

The ASX grew 0.5 per cent in its first full trading week of 2025, buoyed by encouraging inflation figures published on Wednesday that could be a sign of further prosperity to come.

Wednesday’s data showed underlying inflation fell to 3.2 per cent in the year to November, down from 3.5 per cent the previous month, suggesting an inflation slowdown cheered by investors emboldened by the prospect of a February rate cut.

The “weaker than expected” figures led ANZ to revise its forecast for the timing of rate cuts, revealing on Friday that it believed the Reserve Bank will reduce the cash rate by 25 basis points on February 18, before cutting again in August.

“We think the RBA will be cautious in dialling down the restrictiveness of current policy settings, rather than February being the start of an aggressive easing cycle, especially given the uncertainty over the level of current restrictiveness,” ANZ economists wrote on Friday.

ANZ joins Macquarie in moving forward its timeline for rate cuts, while the markets have priced in a 75 per cent chance of a reduction next month.

On Thursday night, the world’s biggest bond market halted a sell-off that had rattled trading around the globe. Yields on US Treasuries stabilised after a rout that had driven 30-year yields to the highest since 2023. US sharemarkets were closed in observance of a national day of mourning for former president Jimmy Carter.

The yield on 10-year Treasuries had changed little at 4.69 per cent. Bitcoin fell 2.5 per cent to $US92,121.89. The key news event on the horizon for investors is US jobs data, due early on Saturday morning (AEDT).

Meanwhile, the US unemployment rate is forecast to hold steady at 4.2 per cent and average hourly earnings growth is likely to cool a touch from a month earlier.

Tweet of the day

Quote of the day

“Our current projections indicate the potential for structural gas shortfalls on the east coast from 2027 unless supply increases or demand decreases.” – ACCC Commissioner Anna Brakey, in sharing the commission’s latest findings into gas supply arrangements in Australia.

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with Bloomberg

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