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Aussie market notches new 2023 low

The Australian share market has closed at a fresh low for the year, dragged down by rate-hike expectations, pressure from rising US bond yields and the geo-political environment.

The benchmark S&P/ASX200 (INDEXASX: XJO) index share price on Thursday retreated 42 points, or 0.6%, to 6,812.3, its lowest close since October 28, 2022. The broader All Ordinaries (INDEXASX: XAO) share price dropped 45.2 points, also 0.6%, to 7,001.1.

Nine of the ASX’s 11 sectors finished lower, with tech the biggest loser, falling 2.6%, led by cloud connectivity company Megaport Ltd (ASX: MP1), which walked back $1.88, or 16.3%, to $9.63.

Megaport share price

Of the big miners, BHP Group Ltd (ASX: BHP) share price rose 21 cents, or 0.5%, to $44.93; Fortescue Metals Group Ltd (ASX: FMG) share price added 19 cents, or 0.9%, to $22.21; and Rio Tinto Ltd (ASX: RIO) share price gained $1.40, or 1.2%, to $117.67, all bid up on China’s plans for more fiscal stimulus to prop up its struggling economy.

Lithium producer Allkem Ltd (ASX: AKE) share price slid 47 cents, or 4.5%, to $10.09, with fellow producer Pilbara Minerals Ltd (ASX: PLS) share price 2 cents weaker, at $3.86. IGO Ltd (ASX: IGO), which mines nickel as well as lithium, share price slipped 10 cents, or 0.9%, and Mineral Resources Ltd (ASX: MIN), producer of iron ore and lithium, share price gave up 99 cents, or 1.7%, to $59.10. Lithium project developer Liontown Resources Ltd (ASX: LTR) share price lost 10 cents, or 5.5%, to $1.71, with the market still digesting the collapse of US company Albemarle Corporation’s (NYSE: ALB) takeover bid.

Allkem share price

Pesky activist lands blow on Whitehaven

In coal, heavyweight Whitehaven Coal Ltd (ASX: WHC) share price suffered a strike against its executive pay regime when more than 40% of shares were voted against the miner’s remuneration report at its annual meeting in Sydney, in a revolt led by London-based hedge fund Bell Rock Capital Management.

Whitehaven Coal share price

The vote means Whitehaven’s board faces a spill motion next year if a second strike is voted: a strike requires 25% of votes to be cast against the executive pay scheme. WHC was unchanged at $7.77.

New Hope Corporation Ltd (ASX: NHC) share price lost 4 cents, or 0.7%, to $6.07, but Coronado Global Resources Inc (ASX: CRN) share price added 3 cents, or 1.8%, to $1.70 and Stanmore Resources Ltd (ASX: SMR) share price rose 10 cents, or 2.6%, to $3.90.

All of the big banks retreated, with Westpac Banking Corp (ASX: WBC) share price down 23 cents, or 1.1%, to $20.57; ANZ Group Holdings Ltd (ASX: ANZ) share price easing 6 cents, or 0.2%, to $24.79; Commonwealth Bank of Australia (ASX: CBA) share price down 35 cents, or 0.4%, to $97.00 and National Australia Bank Ltd (ASX: NAB) share price giving up 12 cents, also 0.4%, to $28.20. Investment bank and wealth manager Macquarie Group Ltd (ASX: MQG) share price lost $2.06, or 1.3%, to $161.40.

Early childhood and care provider G8 Education was pummelled 13 cents, or 11.8%, lower to 97 cents, after reporting a drop in occupancy in the year to October.

US markets flirting with correction

In the US, the tech-heavy Nasdaq Composite (INDEXNASDAQ: .IXIC) Index led the market lower, edging deeper into correction territory (defined as a 10% fall) as Facebook’s parent Meta Platforms Inc (NASDAQ: META) became the latest tech icon to offer a forecast that didn’t quite live up to investors’ expectations. Meta share price fell 3.7%, helping to drag the index 225.62 points, or 1.8%, lower to 12,595.61. The Nasdaq is now down more than 12% since its 2023 peak in July.

The 30-stock Dow Jones Industrial Average (INDEXDJX: .DJI) share price lost 251.6 points, or 0.8%, to 32,784.3, while the broad S&P 500 (INDEXSP: .INX) gauge slid 49.54 points, or 1.2%, to 4,137.23. The S&P 500 is almost in correction town, 9.8% off its closing high for the year, also in July.

The US third-quarter GDP estimate was released, showing annual economic growth of 4.9%, versus economists’ estimates of a gain of 4.3%. The strong showing by the US economy was supported by a robust jobs market and continuing strong consumer spending. All up, that adds to investors’ growing conviction that the Federal Reserve has not completed its rate-hike work.

In the bond market, the US 10-year bond yield slipped 11.3 basis points to 4.849%, and the 2-year yield retreated 9.9 basis points, to 5.046%.

Gold gained US$1.67 to US$1,984.62; the global benchmark Brent crude oil grade slid US$2.20, or 2.4%, to US$87.93 a barrel; and US West Texas Intermediate crude advanced 31 cents, or 0.4%, to US$83.52.

The Australian dollar is buying 63.26 US cents this morning, back above 63 cents, and up from 62.86 US cents at the ASX close on Thursday.

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