ASX closes in the red; Star and Lovisa plunge

By Hannah Kennelly

Updated January 9, 2025 — 5.44pm

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

The numbers

The Australian sharemarket closed lower on Thursday following meagre gains on Wall Street overnight, with shares in major gambling company Star Entertainment plunging 33.3 per cent as the company fights to stay afloat.

Casino operator Star Entertainment is struggling to attract customers and cut costs despite receiving several loans.Credit: Louie Douvis

Across the rest of the market, the S&P/ASX200 fell 19.9 points or 0.2 per cent, to 8329.20 points, with 10 out of 11 industry sectors trading in the red. The losses come after the ASX posted a strong performance on Wednesday, when it gained 0.8 per cent after positive inflation data left investors hopeful for sooner-than-expected interest rate cuts.

The Australian dollar retreated, trading at US62.01¢ at 4.21pm AEDT.

The lifters

Software medical imaging company Pro Medicus (up 3.9 per cent) and medical equipment company ResMed (up 0.6 per cent) pushed the healthcare sector higher, however biotech giant CSL was down 0.3 per cent. Mining heavyweight BHP fell 0.3 per cent, however Rio Tinto (up 0.5 per cent) and Fortescue (up 1.9 per cent) held steady.

The laggards

Star Entertainment was one of the biggest losers on Thursday, plummeting 33.3 per cent. Star told investors late on Wednesday it had just $79 million left in cash, with the casino operator struggling to attract customers and cut costs despite receiving several loans.

Star said it had spent $107 million in the three months to December 31, and said it would be “challenging” to meet the conditions required for the second tranche of its $100 million loan.

The energy sector also lost some its positive momentum from last week with Woodside Energy and Yancoal falling 0.2 per cent, 0.8 per cent respectively.

Fashion jewellery retailer Lovisa slid 10.5 per cent after UBS downgraded the jewellery company to a “sell” rating.

Shopping centre owners Stockland and Vicinity had a tough day, down 1 per cent and 0.5 per cent respectively. Goodman Group was up 0.3 per cent and Scentre was unchanged.

Tech stocks were fairly stagnant on the back of a 1 per cent drop in the nation’s biggest tech company, WiseTech Global. The big four banks were also mixed, with CBA slipping 0.6 per cent, while Westpac, ANZ and NAB were down 0.5 per cent, 0.5 per cent and 0.4 per cent respectively.

The lowdown

Shaw and Partners senior investment advisor Craig Sidney said Star’s balance sheet was not in a strong position.

“They’re in a situation where the cash is quickly diminishing, so they’re either going to be forced to do a deal with someone or raise more money or do something to strengthen that balance sheet,” he said. “It’s a company that hasn’t really been managed well; hence it’s sitting at $0.14 … five years ago, it was $4.”

NSW Premier Chris Minns ruled out providing any cash support or tax breaks for the Star, insisting his government had done all it could with a jobs agreement, signed with the embattled gaming giant last year.

“We have done our bit when it comes to that,” Minns said. “It has to be run on commercial grounds, and it’s a matter for Star, their ownership and their management.”

In the US overnight, Wall Street held firmer, a day after strong reports on the economy hurt stocks by stirring up worries that inflation and interest rates may remain higher than expected.

The S&P 500 rose 0.2 per cent to recover part of its 1.1 per cent slump from the day before. The Dow Jones Industrial Average added 106 points, or 0.3 per cent, and the Nasdaq composite edged down by 0.1 per cent.

In the bond market, which has been the bigger focus for Wall Street recently, the moves were also modest following last month’s charge higher for yields. Higher yields hurt stocks by making it more expensive for companies and households to borrow and pulling some investors toward bonds and away from stocks.

Federal Reserve governor Christopher Waller said on Wednesday he still expects the central bank to deliver more easing of rates in 2025, pushing back against speculation it may already be done after cutting three times since September.

Waller said he didn’t expect tariffs that were possibly coming under President-elect Donald Trump to have a “significant or persistent effect” on inflation. And even though inflation has shown stubbornness recently, Waller still sees it trending downward over the long term.

“If the outlook evolves as I have described here, I will support continuing to cut our policy rate in 2025,” he said.

Tweet of the day

Quote of the day

“What Zuck is promising might sound appealing to some: a return of the internet to its roots, which was designed to allow for free speech and open debate. That’s a naive outlook, however, that doesn’t reflect what the internet is in 2025.”

Read more of David Swan’s opinion piece on Meta’s decision to stop using independent fact-checking organisations here.

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