The laggards

The consumer staples sector (down 0.9 per cent) took a hit from declines in the shares of supermarket giants Woolworths (1.1 per cent) and Coles (1.2 per cent), along with Treasury Wine Estates (down 1 per cent).

Consumer discretionary firms were also weaker, as Wesfarmers shares dipped 0.7 per cent, JB Hi-Fi 0.7 per cent and Harvey Norman 1 per cent.

The energy sector (down 0.5 per cent) was weighed down by market heavyweight Woodside, which shed 1.3 per cent, and Viva Energy, which lost 1.4 per cent.

Sonic Healthcare (down 1.7 per cent), TPG (down 1.6 per cent) and Cleanaway Waste Management (down 1.5 per cent) were the biggest large-cap decliners.

The lowdown

The tables turned on the local bourse, with some of the most rate-sensitive sectors, such as utilities and information technology, advancing after being sold off heavily on Thursday after the release of hotter-than-expected US inflation data.

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However, consumer discretionary companies failed to turn around their fortunes, with the sector recording the second-highest drop in share value by the close. Iron ore miners, including BHP (down 0.9 per cent), also weighed heavily on the ASX 200’s performance.

Earlier, US stocks rebounded strongly from their steep sell-off on Wednesday (US time) as fresh economic data rekindled hopes that inflation remains in a cooling trend.

Interest rate-sensitive megacaps pushed the technology-heavy Nasdaq Composite Index 1.7 per cent higher, while the benchmark S&P 500 Index added 0.7 per cent. The broader Dow Jones Industrial Index ended the trading session relatively flat.

The Producer Prices Index (PPI) numbers came in better than expected, supporting the market’s narrative that US inflation is still on the way down. On Wednesday, worse-than-expected CPI data had sent stocks sharply lower and benchmark Treasury yields to their highest level since November.

“There was a lot of trepidation in the market heading into the CPI reading yesterday,” said NovaPoint chief investment officer Joseph Sroka. “There was probably an equal amount of trepidation coming into today for the PPI report, which was more in line with expectations.

“Investors are starting to absorb the possibility that maybe inflation could linger a little longer, and the Fed’s going to continue to remain patient,” Sroka said.

The latest economic data, though more encouraging, indicated that inflation’s move toward the US Federal Reserve’s 2 per cent target might still be too meandering for the central bank.

Of the 11 major sectors comprising the S&P 500, technology shares were in the vanguard in Thursday’s trading session, while energy shares were the laggards.

The FANG+ index of megacap momentum stocks outperformed, gaining 2.3 per cent.

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with Reuters