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Australian shares dipped on Friday, ending a two-day streak of gains. This decline was led by losses in commodity-related stocks and financials, as global investors awaited the release of U.S. jobs data for indications on the Federal Reserve's interest rate decisions this year. The S&P/ASX 200 index had edged down by 0.22% to 7,814.50 (at 3:40 PM AEST on 5 July 2024), though it remained up by 0.7% for the week.
Anticipation of U.S. Jobs Data
The focus of investors worldwide was on the U.S. nonfarm payrolls report, expected later in the day. According to a Reuters poll of economists, the report is projected to show an increase of 190,000 jobs in June, following a rise of 272,000 in May. This data is crucial as it could provide insights into the timing of the Federal Reserve's anticipated interest rate cuts. Current market expectations suggest nearly 50 basis points of cuts in 2024, potentially starting with a 25-basis-point reduction in September and another by the end of the year.
Sector Performance
Mining and Energy Stocks
In Sydney, the mining sector (XMM) fell by 0.3%. Analysts at Citi have raised concerns about the stability of iron ore prices, contributing to the sector's decline. BHP Group (ASX:BHP) and Rio Tinto (ASX:RIO) saw their shares drop by 0.5% and 0.4%, respectively.
Energy stocks (XEJ) also experienced a decline of 0.2% following an eight-session rally. Despite this dip, the sub-index was on track for its best week since May 10. Notable declines included Woodside Energy (ASX:WDS), which fell by 0.3%, and Santos (ASX:STO), which dropped by 0.8%. The latter's decline came after Saudi Aramco refuted reports that it was considering an offer for the Australian firm.
Financial and Real Estate Sectors
Interest rate-sensitive financials (XFJ) shed 0.2%, with Australia's "Big Four" banks experiencing declines between 0.1% and 0.5%. The real estate sector (XRE) also fell by 0.4% after two consecutive sessions of gains, reflecting broader market trends.
Positive Movers
Healthcare and Technology Sectors
In contrast to the broader market trend, healthcare stocks (XHJ) rose by 0.4%, and information technology stocks (XIJ) gained 0.2%. These sectors managed to buck the overall downward trend, providing some positive movement in an otherwise bearish market.
New Zealand Market
Meanwhile, New Zealand's benchmark S&P/NZX 50 index (.NZ50) remained flat as of 0050 GMT, reflecting a more stable market environment compared to Australia.
