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The share market finished modestly lower as equity markets began to slow ahead of tomorrow’s US market holiday.

A down-tick in the closing auction sealed a loss for the S&P/ASX 200 of 11 points or 0.15 per cent.

The heavyweight banking and mining stocks that fuelled the morning recovery turned mixed in afternoon trade. Energy and utilities were the pick of the sectors. Tech stocks sank for a third session.

What moved the market

The benchmark briefly had a second day of gains within reach before wilting as regional markets soured. The Asia Dow slid 0.7 per cent. Japan’s Nikkei shed 1.68 per cent, China’s Shanghai Composite 0.1 per cent and Hong Kong’s Hang Seng 0.06 per cent.

US futures turned negative in afternoon trade. S&P 500 futures declined nine points or 0.21 per cent.

Trading volumes are likely to decline for the remainder of the week as US market participants abandon their screens for the annual trip home for Thanksgiving. Tonight is the last full session of the week in the US. The exchanges close tomorrow night and only reopen on Friday for a truncated morning session.

“One can expect the US market to see some of the lowest volumes of the year this week,” Kalkine Group CEO Kunal Sawhney said.

“The market usually tends to see lower volatility during this time of the year, possibly due to end of month rotations and rebalancing. However, this downward volatility is generally associated with modest gains for the stock market amid strong holiday travel trends and increased consumer spending. 

“But the effects of Thanksgiving week are likely to remain short-lived, with the market normalising in no time. Thus, investors should be cautious in choosing investments solely because of the market reaction to Thanksgiving week.” 

A bifurcated market overnight saw lenders boosted by rising interest rates and borrowers lowered. Gains in banks helped the Dow climb 0.55 per cent. Pressure on borrowing-dependent growth stocks drove the Nasdaq down 0.5 per cent.

Leaning to live with Covid, slowing Chinese growth, climate change and the windback of stimulus are the issues likely to dominate the coming year, according to CommSec. The broker’s annual “Big Issues” round-up predicts economic growth will double to 4.4 per cent in 2022, underlying inflation tick up to 2.5 per cent and unemployment ease to 4.4 per cent.

Chinese growth is predicted to slow from above 8 per cent this year to 5.3 per cent next year. The broker’s economics team expects the cash rate to remain unchanged until the middle of next year, then hit 0.5 per cent by year-end.

“Before lifting rates the Reserve Bank (RBA) wants underlying inflation to be sustainably between 2-3 per cent; wants to see the jobless rate fall to 4 per cent; and wants to see annual wage growth lift to around 3 per cent in response to a tighter job market. The RBA doesn’t expect these conditions to be realised until 2024, or late 2023 at the earliest,” the report said.

“Commonwealth Bank Group economists believe that these pre-conditions may be met earlier – in fact ‘normalisation’ of rates is expected to begin in November 2022.”

Winners’ circle

The banks turned mixed as Australian bond yields gave up an early advance. Commonwealth Bank rose 0.37 per cent to a second straight gain. ANZ added 0.88 per cent. NAB faded 0.07 per cent and Westpac 0.05 per cent.

Two of the three bulk metal majors squeezed a fourth day of gains out of this week’s rebound in iron ore prices. Fortescue Metals put on 1.27 per cent. BHP added 0.5 per cent. Rio Tinto dipped 0.06 per cent. Ore prices have rebounded amid evidence of a pick-up in demand.

“On the back of strict curbs and sluggish demand, China has managed to control its crude steel production at lower levels so far this year,” Mr Sawhney said. “This has left sufficient room for the steel firms to increase output for the rest of the year. Any increase in steel output volumes is expected to lift the demand and prices for iron ore while increasing the attractiveness of mining shares.” 

Energy companies rose after oil shrugged off a coordinated release of national strategic reserves. Beach Energy put on 2.4 per cent, Woodside 1.6 per cent and Santos 2.23 per cent.

Signs of a turnaround in international travel helped lift Webjet 1.43 per cent. The online travel agent said booking volumes snapped back and its WebBeds business had been profitable since July. Underlying revenues more than doubled in the six months to September from the same period last year. Rival Flight  Centre firmed 0.44 per cent.  

Mesoblast tacked on 1.17 per cent after reporting a smaller quarterly loss as revenues increased. The biotech trimmed its loss to US$22.7 million from US$25.7 million in the prior corresponding period. Revenues more than doubled from US$1.3 million to US$3.6 million.

Doghouse

Technology One led a tech sell-off, skidding 8.61 per cent to a five-week low as brokers lowered their ratings in the wake of yesterday’s full-year result. Nearmap shed 2.48 per cent, WiseTech 2.43 per cent and Afterpay 0.19 per cent.

Harvey Norman dipped 1.73 per cent after confirming a sales and profit hit from lockdowns. Aggregated sales at the retailer for July 1 to November 21 were 8.8 per cent weaker than the same period last year. Unaudited preliminary profit fell 35.5 per cent.

ASX declined 1.45 per cent after market regulator ASIC slapped the exchange operator with additional licence conditions following an investigation into a market outage last November. The conditions require the company to improve its project governance and execution practices.

Investment manager Pinnacle slid 5.6 per cent to $16.52 after raising $105 million from institutional investors at $16.70. The proceeds will fund an investment in Australian private-equity firm Five V Capital.

Private health insurer nib holdings eased 0.71 per cent after taking a 50 per cent stake in digital health start-up Midnight Health. The Australian start-up has 4,500 subscribers. nib will inject $4 million into the business.

PointsBet eased 0.4 per cent to a 15-month low despite winning a betting licence in Virginia. The wagering group’s share price has come under pressure from concerns it was losing market share in the US.

Graincorp shed 2.85 per cent as its shares traded ex-dividend.

Other markets

Oil gave back some of its overnight gains. Brent crude retreated 16 US cents or 0.2 per cent to US$81.17 a barrel. The international benchmark jumped 3.3 per cent overnight.

Gold attempted a bounce-back from four days of decline, rising US$9.90 or 0.55 per cent to US$1,793.70 an ounce.

The dollar faded 0.23 per cent to 72.05 US cents.

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