Australian share market steady ahead of four-day Christmas break

Despite gains in energy and real estate stocks helping to offset a drag in consumer staples, the sharemarket finished flat on Friday.

Australian shares were flat on Friday, the last trading before Christmas, as gains in energy and real estate stocks were weighed down by the consumer staples sector.

The S&P/ASX200 closed 2.5 points lower to 7,501.6 while the broader All Ordinaries gained 2.4 points to 7,730.2.

Over the week, the benchmark index added 0.8 per cent to book four consecutive weekly gains. The ASX200 is now just 131.2 points away from reaching its high water mark of 7,632.8.

After climbing to a five month high of US68c on Friday morning, the Australian dollar finished lower to US67.78c at the close of trading.

The “Aussie” climbed to a five-month high of 68c on Friday morning. Picture: NCA NewsWire

Matt Sherwood, head of investment strategy, multi assets at Perpetual, said many indicators were now showing that a soft landing for the global economy had been overbought.

“Expected earnings growth is double the historic average for next year, and interest rate expectations are double what the US Fed has gotten,” Mr Sherwood said.

“All the good news has been factored in and a lot of the returns that we would have expected next year have actually been pulled forward into 2023.”

Evidence that central banks had quelled inflation remained “scant”, Mr Sherwood added.

“While inflation is coming down, labour markets remain extremely tight, wages growth is high, and structural services inflation is still running above 5 per cent.”

On the local benchmark, iron ore miners moved higher early in trading, tracking gains in the commodity price due to growing expectations of a flurry in winter restocking. On the Singapore exchange, iron ore futures for the January contract added 1.4 per cent to $US137.55 per tonne.

Iron ore miners are nearing record highs amid expectations of winter restocking. Picture: supplied.

Fortescue reached an intraday high of $28.40 — its highest ever — before closing up 1.1 per cent to $28.25. At the end of the session, Rio Tinto and BHP were unchanged at $144.40 and $49.73, respectively .

Overnight, Wall Street rebounded. The Dow Jones index added 322 points, or 0.9 per cent, after recording its worst session since October during the prior session on Wednesday (local time). The S&P 500 index gained 1 per cent and the Nasdaq index climbed 1.3 per cent.

Investors are awaiting fresh US inflation data, due in coming hours for hints on when the US Federal Reserve will begin easing monetary policy.

In company news, Western Australia-based shipbuilder Austal added 7.2 per cent to $1.86 on news that it had secured a contract with the US Navy worth $1.3bn for the construction of three medical ships. The vessels will be built at the company’s shipyards in Alabama.

A2B, the operator of the 13cabs taxi network, soared after receiving a fresh takeover bid. Picture: Supplied.

New Zealand’s Synlait Milk fell 6.5 per cent to 87c after it announced the appointment of an arbitrator to assist with resolving a dispute with its second-largest stakeholder, A2 Milk, following cancellation of their exclusivity arrangements.

Shares in Core Lithium plunged 21.2 per cent to 26c after it said it was conducting a review of its operations amid deteriorating market conditions. The miner also announced the suspension of works at its BP33 mine in the Northern Territory to save costs.

A2B Australia, the operator of the 13cabs taxi network, vaulted 19.9 per cent to $2.14 after Singapore listed transport heavyweight ComfortDelGro lobbed a $182 million takeover offer for the firm.

The share market will be closed until Wednesday due to the Christmas Day and Boxing Day public holidays.

Originally published as Australian share market steady ahead of four-day Christmas break