The Australian sharemarket was firmly in the red by Thursday lunchtime as Wall Street seesawed after the Federal Reserve delivered its first rate cut this year. Santos was leading losses after an Abu Dhabi consortium abandoned its bid for the Australian energy giant.
The S&P/ASX 200 was 45.70 points, or 0.5 per cent, lower at 8772.80 as of 12.52pm AEST, with ten of its 11 industry sectors in the red, led by energy stocks. Tech stocks were the only sector in the green. The Australian dollar was fetching US66.47¢.
Wall Street had a rocky afternoon after the Fed announcement. Credit: Bloomberg
Employment figures released this morning weren’t able to boost investor sentiment. The Australian Bureau of Statistics reported that despite the jobless rate remaining steady at 4.2 per cent last month, the total number of people in work fell by 5000. Full-time employment dropped by a large 41,000, offset by a 36,000 increase in part-time work.
Concerns about rising unemployment has weighed on the market recently amid a series of job cuts by some of Australia’s biggest banks, including ANZ Bank, NAB and Bendigo Bank.
Looking at individual movers, Santos plunged 12 per cent after XRG, the foreign investment arm of the Abu Dhabi National Oil Company (ADNOC), and its bidding partners on Wednesday night said they had withdrawn their blockbuster offer to acquire the second-largest Australian oil and gas company, ending months of negotiations. Rival Woodside was 5.8 per cent lower.
Mining stocks retreated with iron ore heavyweights BHP (down 0.6 per cent), Rio Tinto (down 0.8 per cent) and Fortescue (down 0.5 cent) all lower in midday trade as iron ore prices eased overnight. Among gold miners, Northern Star slipped 0.4 per cent and Evolution Mining shed 1.4 per cent.
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Financial stocks also wobbled, led lower by the Commonwealth Bank (down 1.5 per cent). With CBA not only the biggest stock on the ASX, but also more than double the market value of its nearest rival NAB, it sent down the entire financial sector even as the remaining big four were higher, with NAB up 1.3 per cent, while ANZ Bank edged up 0.1 per cent and Westpac rose 0.6 per cent.
Macquarie Group was 0.5 per cent lower. US news website Semafor reported the ‘Millionaires Factory’ held early talks to acquire US private equity giant Carlyle, which would have created an investment behemoth, managing more than $US1 trillion ($1.5 trillion). However, the talks fizzled in winter as the share price of Carlyle made strong gains as a corporate turnaround plan gained traction. Macquarie declined to comment on Thursday.