Australia Market extends losses on global recession

Australia stock market finished session lower on Friday, 16 December 2022, extending the losses in the previous session, on following the broadly negative cues from offshore markets overnight, amid fears that central bank across the globe interest rate hikes will prompt a global recession.

Overnight, stocks tumbled in the US and Europe as investors grew increasingly concerned that the Federal Reserve and other central banks are willing to risk a recession to bring inflation under control.

Concerns about the outlook for interest rates continued to weigh on market as central banks in Europe raised interest rates a day after the US Federal Reserve hiked its key rate again. The Fed raised its short-term interest rate by half a percentage point on Wednesday, its seventh increase this year. Central banks in Europe followed along Thursday, with the European Central Bank, Bank of England and Swiss National Bank each raising their main lending rate by a half-point Thursday. The BoE rate is now at a 14-year high at 3.5%, while the ECB rate rose to 2%

At closing bell, the benchmark S&P/ASX200 index was down 56.08 points, or 0.78%, to 7,148.70. The broader All Ordinaries index fell 52.75 points, or 0.71%, to 7,337.60.

Total 9 of 11 sectors were lower along with the S&P/ASX 200 Index. Utilities was worst performing sector, declining 2.1%, followed by information technology (down 2.04%), healthcare (down 1.6%), and consumer discretionary (down 1.14%). Energy was the best performing sector, gaining +0.35%.

The top performing stocks in S&P/ASX200 index were SAYONA MINING and AURIZON HOLDINGS, up 4.9% and 4% respectively. The bottom performing stocks in S&P/ASX200 index were SILVER LAKE RESOURCES and BLOCK INC., down 6.40% and 6.25% respectively.

Shares of tech companies suffered notable losses, with software company Xero falling 3% to $73.50.

Financials continued to trade on the back foot, with all big four banks down at the end of the session. NAB slid 1.3%.

Shares of energy companies advanced. Rio Tinto rose 1.3%, while coal player Yancoal gained 2.8%. Meanwhile, petroleum company Ampol closed 2.5% higher, and diversified energy firm New Hope Corporation lifted 2.8%.

Shares of rail transport company Aurizon Holdings jumped 4% to $3.90 after the company secured $425 million for investors by offloading One Rail's coal haulage business to a joint venture half-owned by M Resources founder Matt Lattimore.

ECONOMIC NEWS: Judo Bank Flash Purchasing Managers Index (PMI) data released on Friday showed that Australian private sector output decreased from 48.0 to 47.3 in December - its third successive monthly decline - due to weakening demand for goods and services.

Australia's manufacturing sector continued to expand in December, albeit at a slower pace, the latest survey from S&P Global revealed on Friday with a manufacturing PMI score of 50.4. That's down from 51.3 in November, although it remains above the boom-or-bust line of 50 that separates expansion from contraction. The survey also showed that the services PMI fell to 46.9 from 47.6 and the composite PMI sank to 47.3 from 48.0.

CURRENCY NEWS: The Australian dollar was stood at 0.6706 against greenback on Friday, up by 0.07% from yesterday's close of 0.67001, after trading in the range of 0.6697-6736.

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