ASX falls as miners slump; Insignia jumps, DigiCo dips on debut

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

The numbers

The Australian sharemarket closed lower on Friday as mining, real estate and utility stocks dragged on the index following a negative lead from Wall Street.

The S&P/ASX 200 index fell by 34.3 points, or 0.4 per cent, to 8296 points at the close, with eight of the 11 industry sectors in the red. Materials (down 1.8 per cent) recorded the steepest fall, while energy stocks gained 0.4 per cent.

President-elect Donald Trump rang the bell to open the session then walked the trading floor.Credit: AP

The lifters

The energy sector was the best performer on Friday, with shares from Woodside and Santos each gaining 0.5 per cent, helping boost the sector.

Financial services company Insignia Financial, previously called IOOF, jumped 6.2 per cent in after it received a non-binding takeover from Bain Capital at $4 per share.

Three of the four major banks recovered from early losses to finish the session in positive territory, with ANZ rising by 0.03 per cent, Commonwealth Bank up 0.4 per cent, and Westpac gaining 0.7 per cent. Although NAB reduced its losses, it ended the day down by 0.1 per cent.

At Westpac’s annual general meeting in Sydney, chairman Steven Gregg said it had been a challenging economic environment for the bank, and it expected a “modest economic recovery” in Australia and New Zealand. It was the final AGM for chief executive Peter King, who will be replaced by Anthony Miller from Monday.

Speaking at the AGM, King said the bank had observed a continued decline in hardship among mortgage customers. He added that this year Westpac offered more than 47,000 personalised support packages, with about 75 per cent of those customers requiring assistance for three months. The number of outstanding support packages peaked just under 20,000 in June but had decreased to 17,500 by the end of November.

Shares in Nine Entertainment gained 0.4 per cent, with news that former banking executive Timothy Longstaff has been appointed as an independent non-executive director on its board, effective from January 1, 2025.

Longstaff holds director positions at Snowy Hydro, Inghams Group and is a member of the Takeovers Panel. He joins Nine’s audit and risk management committee and will succeed committee chair Samantha Lewis, who will retire from the board before the end of the 2025 financial year.

The laggards

In the biggest float of 2024, shares in the DigiCo REIT started trading on Friday under the ticker DGT. The shares reached $5.05 in the first hour of trading, but ultimately closed lower at $4.55. The company, an owner and manager of data centres, is listing on the sharemarket amid a wave of investor enthusiasm for data centre assets, thanks in part to the excitement around artificial intelligence.

Mining shares closed weaker, with shares in Rio Tinto down 2.8 per cent following an announcement that the company has approved a $2.5 billion expansion to the Rincon project in Argentina despite growing concerns over lithium prices. BHP (down 1.5 per cent) and Fortescue (down 2.7 per cent) also lost ground.

Shares from insurance broker Steadfast Group slipped by 0.5 per cent after the company announced the Australian Securities and Investments Commission (ASIC) has requested documents to investigate two of its employees.

Resolute Mining shares fell by 1.2 per cent after it said chief executive Terry Holohan would take a leave of absence until January 31. Resolute also announced the third and final settlement payment to the government of Mali would be made before the end of the month.

The lowdown

AMP chief economist Shane Oliver said Australian shares fell around 1.7 per cent for the week, with falls led by IT, financial, industrial and property shares.

“It’s worth noting that while December is normally a seasonally good month for shares, the first half of the month is often a bit soft before strength kicks in over the Christmas period. But of course, it’s not guaranteed,” he said.

Oliver said global and Australian shares are expected to return a far more constrained 7 per cent in the year ahead.

“Stretched valuations after two strong years, the ongoing risk of recession, the likelihood of a global trade war and ongoing geopolitical issues will likely make for a volatile ride in 2025 with a 15 per cent correction somewhere along the way highly likely,” he said.

“But central banks cutting rates, with the RBA joining in, and prospects for stronger growth later in the year supporting profits should still see okay investment returns.”

Overnight in the US, stock indexes fell following some potentially discouraging data on the economy. The S&P 500 slipped 0.5 per cent for its fourth loss in the last six days. It’s a pause for the index, which has been rallying toward one of its best years of the millennium.

The Dow Jones lost 234 points, or 0.5 per cent, and the Nasdaq composite sank 0.7 per cent from its record set the day before.

A report early in the morning said more US workers applied for unemployment benefits last week than expected. A separate update showed that inflation at the wholesale level, before it reached US consumers, was hotter last month than economists expected.

Neither report points to imminent disaster, but they dilute one of the hopes that’s driven the S&P 500 to 57 all-time highs so far this year – inflation is slowing enough to convince the Federal Reserve to keep cutting interest rates, while the economy is remaining solid enough to stay out of a recession.

Of the two reports, the weaker update on the job market may be the bigger deal for the market, according to Chris Larkin, managing director, trading and investing, at E-Trade from Morgan Stanley. A surge in egg prices may have been behind the worse-than-expected inflation numbers.

“One week doesn’t negate what has been a relatively steady stream of solid labor market data, but the Fed is primed to be sensitive to any signs of a softening jobs picture,” he said.

Traders are widely expecting the Fed will ease its main interest rate at its meeting next week. If they’re correct, it would be a third straight cut by the Fed after it began lowering rates in September from a two-decade high. It’s hoping to support a slowing job market after getting inflation nearly all the way down to its 2 per cent target.

Tweet of the day

Quote of the day

For mortgage broker Aaron Christie-David, the issue of limited borrowing capacity comes up regularly for high-income earners in technology, finance, medicine, law, accounting and business.

“$200,000 is the new $80,000 – $200,000, to me, doesn’t go very far.”

That’s mortgage broker Aaron Christie-David speaking about the issue of limited borrowing capacity which he says comes up regularly for high-income earners in technology, finance, medicine, law, accounting and business.

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With AP

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