Australian Market Modestly Lower

The Australian stock market is modestly lower on Thursday, extending the losses in the previous session, with the benchmark S&P/ASX 200 staying above the 7,200 level, following the broadly negative cues overnight from Wall Street, with weakness across all sectors, particularly technology and gold miners.

Reports of the first Omicron cases detected in the U.S. and growing concerns about the efficacy of Covid-19 vaccines against the Omicron variant are hurting market sentiment.

The benchmark S&P/ASX 200 Index is losing 26.90 points or 0.37 percent to 7,209.00, after hitting a low of 7,168.90 earlier. The broader All Ordinaries Index is down 38.10 points or 0.50 percent to 7,519.70. Australian markets ended modestly lower on Wednesday.

Among major miners, Rio Tinto and Mineral Resources are losing 1.5 percent each, while Fortescue Metals is edging down 0.5 percent, OZ Minerals is declining more than 2 percent and BHP Group is down more than 1 percent.

Oil stocks are mostly lower. Origin Energy is losing almost 1 percent, Woodside Petroleum is declining more than 2 percent, Oil Search is slipping more than 1 percent and Beach Energy is losing almost 2 percent, while Beach Energy and Santos are down almost 2 percent each.

Among the big four banks, Commonwealth Bank and National Australia Bank are gaining almost 1 percent each, while ANZ Banking is edging down 0.5 percent and Westpac is losing almost 1 percent.

In the tech space, Zip is losing almost 4 percent, Appen is declining almost 3 percent, WiseTech Global is down almost 2 percent and Xero is siding more than 4 percent. Afterpay is slipping almost 5 percent after shareholder approval of its $39 billion takeover acquisition by Square has been delayed.

Gold miners are also lower. Newcrest Mining is losing more than 2 percent, Evolution Mining is declining more than 3 percent, Northern Star Resources is down almost 3 percent and Gold Road Resources is slipping almost 4 percent. Resolute Mining is gaining almost 1 percent.

Shares of API are soaring almost 16 percent after supermarket chain Woolworths emerged as a competing buyer for Priceline owner after it outbid Wesfarmers with a surprise $870 million acquisition offer as the retailer expands its operations in the healthcare space.

James Packer-backed casino giant Crown Resorts has rejected the third takeover offer from Blackstone but will open its books to the private equity giant in the hope that it will increase its $8.46 billion bid.

In economic news, Australia had a seasonally adjusted merchandise trade surplus of A$11.22 billion in October, the Australian Bureau of Statistics or ABS said on Thursday. That exceeded expectations for a surplus of A$11.0 billion following the downwardly revised A$11.82 billion trade surplus in September (originally -A$12.243 billion). Exports dropped 3.0 percent on month or A$1.491 billion to A$43.053 billion. Goods were down 3.0 percent on month, while services fell 6.0 percent. Imports also slipped 3.0 percent on month or A$887 million to A$31.833 billion. Goods were down 3.0 percent on month, while services fell 2.0 percent.

The ABS also said the value of retail sales in Australia advanced a seasonally adjusted 4.9 percent on month in October, coming in at A$31.130 billion. That was in line with expectations following the 1.3 percent gain in September. On a yearly basis, retail sales advanced 5.2 percent.

Further, the ABS said the value of owner-occupied home loans in Australia was down a seasonally adjusted 4.1 percent on month in October, the Australian Bureau of Statistics said on Thursday, coming in at A$19.84 billion. That missed forecasts for an increase of 1.0 percent following the 2.7 percent decline in September. Overall home loans were worth A$29.57 billion, down 2.5 percent on month. On a yearly basis, owner occupied loans were up 15.1 percent, investment lending skyrocketed 89.6 percent and overall lending surged 32.2 percent.

In the currency market, the Aussie dollar is trading at $0.711 on Thursday.

On Wall Street, stocks showed a strong move to the upside in early trading on Wednesday but pulled back sharply over the course of the session. With the downturn on the day, the Dow fell to a nearly two-month closing low, while the Nasdaq and S&P 500 hit their lowest closing levels in over a month.

The major averages saw further downside going into the close, ending the session at their worst levels of the day. The Dow tumbled 461.68 points or 1.3 percent at 34,022.04, the Nasdaq plunged 283.64 points or 1.8 percent to 15,254.05 and the S&P 500 slumped 53.96 points or 1.2 percent to 4,513.04.

Meanwhile, the major European markets also showed strong moves to the upside on the day. While the U.K.’s FTSE 100 Index jumped by 1.6 percent, the French CAC 40 Index and the German DAX Index surged up by 2.4 percent and 2.5 percent, respectively.

Crude oil prices showed a strong move to the upside in early trading on Wednesday but came under pressure over the course of the session on news of the Omicron case. Crude for January delivery slumped $0.61 or 0.9 percent $65.57 a barrel, its lowest closing level in three months.

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