The Australian sharemarket dropped on Wednesday after key US jobs data did little to bolster expectations of further interest-rate cuts and oil fell to its lowest level in almost five years.
The S&P/ASX 200 was down 13.7 points, or 0.2%, at 8585.20, with 10 of the 11 sectors lower, led by energy.
Wall Street had a mixed session overnight after the US unemployment rate edged up to 4.6% from 4.4%. Evercore ISI economist Krishna Guha said the data were not “weak enough to spur another near-term rate cut”. Bond markets are pricing in roughly a 20% chance of a US Federal Reserve rate cut in January.
On the ASX, Woodside fell 2.4% to $23.4 after Brent crude slid 2.7% to settle at $US58.92 a barrel overnight, as traders weighed the prospect of a deal in Ukraine that could ease restrictions on Russian oil exports. Ampol was down 1.4% to $32.12. Santos fell 1.2% to $6.04 after executing a conditional sale to divest its 42.86% operated interest in the Mahalo joint venture in Queensland’s Bowen Basin to Comet Ridge.
The prospect of an end to the Ukraine conflict weighed on defence stocks, with DroneShield down 12.1% to $2.47 as investors took profits following a rally of more than 20% earlier in the week. Shipbuilder Austal tumbled 11.5% to $5.94.
Consumer staples were also weaker after Treasury Wine Estates dived 9.3% to $4.98 following a profit downgrade, which Citi said was 31% below consensus. GrainCorp fell 15.5% to $7.09 after agreeing to sell its interest in GrainsConnect Canada at a loss of between $5 million and $10 million and warning of a weaker-than-expected east coast harvest.
Materials were the sole gainer as spot gold climbed above $US4300 an ounce and JPMorgan upgraded its lithium outlook, forecasting higher prices into 2026 as demand returns. Northern Star rose 3.8% to $27.12, and Catalyst Metals 8.4% to $7. IGO jumped 11.6% to $7.63 and Liontown Resources rose 11.8% to $1.51 after JPMorgan upgraded both stocks.
eToro market analyst Farhan Badami said strength in materials had masked a lacklustre week for the broader market.
“Market confidence is gradually returning to parts of the lithium sector, shown by Liontown’s performance over the past three months, and investors are gravitating towards areas with clearer near-term pricing momentum.”
Humm Group surged 10.6% to 73¢ after Credit Corp lobbed a takeover bid for the fintech, offering a scheme of arrangement at 77¢ a share or an off-market takeover at 72¢. Credit Corp fell 2.9% to $13.54.
PointsBet added 0.6% to 90¢ after appointing Andrew Catterall as group chief executive, effective February 1, subject to gaming licensing and regulatory approvals.
Sandfire Resources rose 1% to $16.82 after the copper producer said an updated pre-feasibility study confirmed the development potential of its fully permitted Black Butte project in Montana.