AUS
NZ
UK
CA
USA
IND
Highlights
- Australian stocks dip 0.5% on weaker banks and miners, ending a three-day rally.
- Reserve Bank of Australia (RBA) expected to start rate cuts in early 2025.
- Energy stocks shine with oil prices surging amid U.S. crude inventory drawdowns.
The Australian stock market slipped on Monday, ending its three-session winning streak, as losses in financials and mining stocks outweighed gains in the energy sector. The S&P/ASX 200 index fell by 0.5% to 8,222.2 points in thin year-end trading. Despite the decline, the benchmark has advanced 8.4% this year, marking its second consecutive annual gain.
The subdued performance comes as investors balance optimism over domestic economic recovery with concerns about uneven growth in China, Australia's largest trading partner.
Banks Lead Decline Amid Rate Speculation
The financial sector led the day's losses, retreating 0.6% after its recent rally. The "Big Four" banks—Commonwealth Bank of Australia (ASX:CBA), Westpac, National Australia Bank (ASX:NAB), and ANZ (ASX:ANZ)—fell between 0.1% and 0.5%. Investors are looking ahead to the Reserve Bank of Australia's (RBA) first policy meeting of 2025, with expectations mounting for a rate-cutting cycle to begin in February.
JP Morgan analysts predict the central bank will lower interest rates by 25 basis points, following a dovish stance in the RBA’s December meeting minutes.
Miners Weighed Down by Falling Commodity Prices
Mining stocks were under pressure as iron ore prices dropped to a five-week low after a decline in steel production in China. The mining sector dipped 0.1%, with heavyweights BHP (ASX:BHP) and Fortescue Metals (ASX:FMG) slipping 0.1% and 0.3%, respectively. Rio Tinto, however, bucked the trend, posting a 0.3% gain.
Gold stocks also felt the pinch, retreating 0.2% due to weaker bullion prices. Northern Star Resources (ASX:NST) dropped 0.5%, while Evolution Mining (ASX:EVN) managed a slight 0.2% increase.
Energy Sector Provides a Bright Spot
Energy stocks emerged as a rare bright spot, gaining 0.7% on the back of higher oil prices. U.S. crude inventories experienced a significant drawdown, boosting market sentiment. Leading the energy rally were Woodside (ASX:WDS), which rose 1%, and Santos (ASX:STO), up 0.8%.
New Zealand Market Also Dips
Across the Tasman Sea, New Zealand’s S&P/NZX 50 index also ended lower, dropping 0.2% to 13,172.3 points after four consecutive sessions of gains.
