Australian Stock Market Slips; Myer Shares Tumble 16%

January 13, 2025 11:11 AM AEDT | By Team Kalkine Media

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Australian Stock Market Slips; Myer Shares Tumble 16% — Image source: shutterstock

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Highlights

Australian stock market drops amid global rate concerns.

Myer (MYR) shares fall nearly 16% after market update.

Energy sector rises as oil prices hit a three-month high.

The Australian share market faced a sharp decline on Monday as global economic concerns loomed large. A surprising surge in U.S. job creation has dashed hopes for imminent interest rate cuts by the Federal Reserve, triggering a sell-off across major indices.

At mid-morning, the S&P/ASX 200 fell by 1%, shedding 80.5 points to 8213.60, following significant losses on Wall Street late last week. The All Ordinaries Index mirrored the downturn, also slipping by 1%. The U.S. labor market posted a robust addition of 256,000 non-farm payroll jobs in the previous month, far exceeding the anticipated 164,000. This strengthened the case for the Federal Reserve to maintain its current interest rate policy, sending the S&P 500 down 1.5% on Friday.

Back home, 10 out of 11 ASX sectors closed in the red, with banking and technology leading the decline. Commonwealth Bank (ASX:CBA) dropped 1.9%, NAB (ASX:NAB) fell 1.7%, and ANZ (ASX:ANZ) slipped 1.3%. Among tech stocks, WiseTech Global (ASX:WTC) saw a notable 2.2% drop.

Retail stocks bore the brunt of investor disappointment after Myer (ASX:MYR) issued a lackluster trading update, leading to a sharp 15.7% decline in its share price. The ripple effect extended to Premier Investments (ASX:PMV), whose shares fell by 13.7%.

Energy stocks emerged as a rare bright spot. Oil prices surged to a three-month high, with Brent crude settling at $US79.46 per barrel following the announcement of additional U.S. sanctions against Russia. Woodside Energy (ASX:WDS) capitalized on the rally, gaining 2.2%.

Insignia Financial (ASX:IFL) rose 2.4% after receiving a $4.30 per share acquisition bid from Bain Capital, matching an earlier proposal from CC Capital.

DroneShield (ASX:DRO) edged 1.6% lower amid a significant uptick in short-selling activity against the defense technology firm.

Novonix (ASX:NVX) shares dropped 3.5% after the U.S. Department of Energy announced that the company would not be eligible for specific tax credits, impacting its plans for a new facility in Tennessee.

As markets adjust to the implications of U.S. monetary policy, investors continue to monitor sector-specific developments and global economic shifts.

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