Gold miner Westgold dropped more than 14 per cent by the close after revising its full-year financial year production guidance, while Harvey Norman (down 2.8 per cent) weighed down the consumer discretionary sector (down 2.2 per cent).

Real estate investment trusts (REITs, down 3 per cent) were also weaker with all mega-caps in the sector trading in negative territory, and heavyweight Goodman Group losing 2.6 per cent. Iron ore heavyweights BHP (down 0.6 per cent) and Fortescue (down 0.9 per cent) also dragged the local bourse lower.

The lowdown

Interest rate sensitive sectors, including technology, REITs and consumer discretionary companies, were among the weakest on the Australian sharemarket as expectations for earlier US Federal Reserve rate cuts tapered amid stronger-than-expected economic data.

A barrel of Brent Crude, the international standard, climbed $US1.50 to $US88.92 overnight, lending some steam to oil heavyweights Santos and Woodside in early trade. By the end of the trading day, however, utilities was the only sector firmly in the green.

Financials were weaker despite S&P Global Ratings now assessing the Australian banking industry’s institutional framework at the lowest risk level on its scale, in line with those in Canada, Hong Kong and Singapore.

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“Continued strengthening of regulatory and governance standards in the Australian banking sector has reduced industry-wide risks,” the ratings agency said.

“Consequently, we raised our long-term issuer credit ratings on most of the non-major Australia-based banks and other financial institutions.”

Overnight, the S&P 500 fell 0.7 per cent for its worst day in four weeks. It was its second straight drop after setting an all-time high to close last week.

Other indexes did worse. The Dow Jones lost 1 per cent and likewise pulled further from its record. The Nasdaq composite fell 1 per cent and the small stocks in the Russell 2000 index tumbled 1.8 per cent.

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One of the big reasons the US sharemarket has screamed higher since late October is the expectation that the Federal Reserve will cut interest rates several times this year. The US central bank itself has hinted as much, and an easing of rates would relieve pressure on the economy and financial system.

But Fed officials have also said they need further confirmation inflation is heading sustainably down to their 2 per cent target before acting. A surprisingly strong report on US manufacturing on Monday, which showed a return to growth after 16 straight months of contraction, hurt those expectations.

In Europe, stocks fell 0.9 per cent in Paris. Germany’s DAX lost 1.1 per cent and London’s FTSE 100 was 0.2 per cent lower.

In Asia, indexes were mixed. Hong Kong’s Hang Seng jumped 2.4 per cent, but moves were much more modest elsewhere.

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“Interest rates appear to have stabilised, no doubt providing some comfort to vendors, along with economist predictions that any next interest rate move will likely be downward,” said Nick Lower, national director of hotels at Savills who has witnessed a recent increase in activity for sale process and transactions during the first quarter of the year.

You may have missed

For Australian investors on the lookout for local companies taking the world by storm, luxury fashion retailer Cettire is hard to miss with its shares up more than 900 per cent since July 2022. And it is not hard to see why.

With AP

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