ASX finishes 2024’s last session in the red; Mining, real estate stocks slide

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

The numbers

The Australian sharemarket finished the last trading session of 2024 in the red, as consumer and real estate stocks dragged the local bourse lower after a disappointing day on Wall Street.

The S&P/ASX 200 fell 75.9 points, or 0.9 per cent, to 8159.1 points on Tuesday, with nine of the 11 industry sectors sliding. Trading finished early at 2.30pm AEDT for New Year’s Eve. The losses come after the ASX shed 0.3 per cent on Monday. The Australian dollar was flat at 62.13 US cents, taking its loss for the year to 8.8 per cent amid concern about China’s growth prospects and a rise in the US dollar after Donald Trump’s election victory.

Looking at the year that was, the local bourse lagged its US counterpart and performed a tad worse than it did last year amid cost-of-living pressures and rising interest rates. The losses over the past two days trimmed its 12-month return to 7.5 per cent, short of the market’s 7.8 per cent gain in 2023. Looking at industry sectors, tech companies got a boost as artificial intelligence progressed, while financial stocks – spurred on by Commonwealth Bank – were among the best performers.

It was another day of losses on Wall Street.Credit: Bloomberg

The lifters

Energy giants Woodside (up 0.5 per cent) and Santos (up 0.3 per cent) were among the few companies advancing in Tuesday trade after oil prices edged higher overnight.

Crude is still heading for a loss this year, with trading confined to a narrow range since mid-October.

Ampol (up 1.2 per cent), Yancoal Australia (up 1.1 per cent), and Whitehaven Coal (up 0.8 per cent) also rose. Origin Energy (up 0.4 per cent), APA Group (up 0.3 per cent) and AGL (up 0.3 per cent) all finished higher.

The laggards

No sector lost more than real estate (down 1.7 per cent) on the last day of 2024, led lower by warehouse property trust Goodman Group (down 2 per cent), Westfield shopping centre owner Scentre Group (down 1.7 per cent) and diversified property group Mirvac (down 2.3 per cent).

Retailers also struggled, with the consumer discretionary sector finishing 1.4 per cent lower. Kmart and Bunnings owner Wesfarmers lost 1.2 per cent, while JB Hi-Fi slid 4.1 per cent.

Losses in the mining sector were spurred by industry heavyweights BHP (down 0.7 per cent), Fortescue (down 1.4 per cent), and Rio Tinto (down 0.4 per cent). The retreat was compounded by gold miners, with Newmont (down 2.1 per cent). Gold prices have ticked lower since Donald Trump’s sweeping victory in November’s US presidential election even as their gains over 2024 still outstrip those of most other commodities.

The technology sector was also down, following losses of the US tech giants overnight. Family tracking app Life360 lost 2.3 per cent, while WiseTech (down 1.6 per cent) and NextDC (down 1.5 per cent) both slid.

Financial stocks weakened, with Commonwealth Bank – the largest stock on the ASX – down 1.2 per cent. It was joined in the red by Westpac (down 0.7 per cent), NAB (down 0.8 per cent) and ANZ (down 0.8 per cent). Macquarie lost 1 per cent, while insurers QBE (down 1 per cent) and Suncorp (down 2.1 per cent) also fell.

The lowdown

The local declines come after the S&P 500 fell as much as 1.7 per cent early in the session on Monday and closed down 1.1 per cent. Apple, Microsoft and Tesla all weighed on the index. The Dow Jones Industrial Average dropped 1 per cent and the Nasdaq lost 1.2 per cent.

It was the third consecutive decline for both the S&P 500 and the Nasdaq 100, and also the third time the indexes dropped more than 1 per cent in eight sessions. Treasuries rallied, with the 10-year yield hovering around 4.54 per cent.

Wall Street still has another trading session to finish off the year.

IG market analyst Tony Sycamore said while there was no “specific news catalyst” for its decline on Monday, thin holiday trading volumes and end-of-quarter rebalancing away from shares into bonds were suspected to be playing a role in the sluggish end to the year.

Further gains are forecast for the sharemarket in 2025, though geopolitical uncertainties starting with Trump’s inauguration on January 20 are expected to present some challenges for investors. The US president-elect plans to implement his America-first policies from his first day in office in moves that are likely to disrupt global trade.

Tim Waterer, chief market analyst at Kohle Capital Markets, said that “there’s a little bit of trepidation heading into year-end, owing in part to uncertainty over how the international trade picture may take shape in 2025.”

“Some traders are taking risk off the table heading into year-end.”

Looking at the biggest winners on Wall Street this year, the so-called Magnificent Seven cohort of US tech giants has driven a 25 per cent advance in the S&P 500, while prompting some to worry that the gains are too concentrated in a small group of names.

Still, few are calling for the rally on Wall Street to end and none of the 19 strategists tracked by Bloomberg expects the S&P 500 to decline next year.

“In these moments, it’s best to stay put,” said Nicolas Domont, a fund manager at Optigestion in Paris. “The US remains the place to be. Growth stocks continue to outperform and earnings forecasts are good, so there are good reasons to remain optimistic.”

Boeing’s shares fell 2.3 per cent in their first day of trading after the deadly crash of a 737-800, a widely used model that is a staple of low-cost airlines, at an airport in South Korea. The passenger plane, operated by Jeju Air, was carrying 181 people, and all but two were killed.

Boeing said in a statement it was in contact with Jeju Air and was ready to help the airline. Jeju Air’s stock fell 8.7 per cent at the close of trading in Seoul on Monday, hitting a record low.

In other financial markets, Europe’s Stoxx 600 index retreated, while Asian stocks snapped five days of gains. Trading volumes were thinner because of the holiday season.

The New York Stock Exchange, the Nasdaq’s US equities exchanges and Cboe Global Markets said they will close on January 9 for a national day of mourning for President Jimmy Carter, who died on Sunday aged 100. The US stock market traditionally closes on the day of presidential funerals.

Tweet of the day

Quote of the day

“Back in the 1990s, we looked forward to a world of entrepreneurial vigour, public sector discipline and spreading peace. What we got, instead, was the very opposite: oligopoly, government splurge and militarised blocs.”

Read more from Adrian Wooldridge, author of The Aristocracy of Talent: How Meritocracy Made the Modern World, on how the 21st century has turned out so wrong.

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with AAP and Bloomberg