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A broad sell-off dragged the share market from a two-month high following soft leads from Wall Street and commodity markets.

Nine of eleven sectors declined as the S&P/ASX 200 shed 31 points or 0.42 per cent. The retreat reversed almost half the index’s gain over the last two sessions.

BHP, Rio Tinto and CSL were the biggest drags. Transurban, Westpac and Fortescue Metals resisted the down-pressure.

What’s driving the market

The market’s third attempt at cracking stubborn technical resistance in the 7470-7480 area was cruelled by lacklustre overnight leads. The S&P 500 finished dead flat as a jump in treasury yields weighed on Big Tech. The Dow and Nasdaq Composite dipped less than 0.1 per cent.

Also weighing on sentiment: the heaviest decline in consumer confidence in 14 weeks. The ANZ-Roy Morgan confidence index slumped 2.8 per cent last week to 106 as Australians fretted over the cost of living and a jump in unemployment. The survey’s measure of inflation expectations hit a six-and-a-half-year high.

“Record petrol prices, higher food prices, elevated utilities bills and annual insurance price hikes are worrying households ahead of the Christmas shopping period,” CommSec’s senior economist Ryan Felsman said. “And anyone trying to book a domestic holiday will have encountered a sharp lift in the cost of accommodation due to a surge in demand for summer getaways.”

Inflation was also top of the agenda when the Reserve Bank met earlier this month. The minutes from the policy meeting released this morning showed the bank abandoned its attempt to suppress lending rates because rising inflation meant it may have to raise the cash rate sooner than it expected. The bank dropped its target for the three-year government bond yield, one of the emergency measures introduced at the start of the pandemic.

“Members noted that the main argument for retaining the yield target was that it remained consistent with the central forecast for the economy, which accorded with the cash rate remaining at its current level until 2024,” the minutes said. “However, as the risks to the inflation forecast had shifted higher, it had become possible that an earlier increase in the cash rate would be appropriate.”

The board reiterated that it would not raise the cash rate until the nation returned to full employment and inflation was between 2 and 3 per cent “on a sustainable basis”. Governor Philip Lowe was scheduled to give a speech on inflation this afternoon.

The dollar firmed 0.14 per cent to 73.55 US cents.

Going up

Property and utilities were the only sectors to resist this morning’s downtrend. APA Group gained 1.46 per cent, SCA Property 1.25 per cent, Charter Hall Retail 0.97 per cent and Origin Energy 0.81 per cent.

Mirvac edged up 0.36 per cent after CEO Susan Lloyd-Hurwitz told today’s AGM the developer was entering the “biggest delivery phase” in its history. The company has $28 billion in projects underway.

Ms Lloyd-Hurwitz said the work “in the long term will contribute to high-quality recurring income, while providing capital partnering opportunities and further development upside”.

Lifestyle Communities gained 1.28 per cent after CEO James Kelly told today’s AGM sales rates held up well despite lockdowns closing offices and preventing onsite inspections. The company achieved 141 sales to the end of October, with another 245 homes sold, but not settled.

The morning’s best performers aside from REITs and utilities were Virgin Money UK +3.26 per cent, Incitec Pivot +1.39 per cent and Whitehaven Coal +1.23 per cent.

Of the heavyweights, Transurban put on 0.55 per cent, Westpac 0.31 per cent and Fortescue Metals 0.13 per cent. NAB and Goodman Group advanced less than 0.1 per cent.

Going down

Telstra eased 0.5 per cent as investors heard more about the telco’s plans to expand its footprint into digital health and energy. By FY25 the company aims to generate $500 million in annual revenue through Telstra Health and be a top five energy retailer, today’s Investor Day was told.  

OZ Minerals raised its total copper ore reserves by 5 per cent after updating the resources at its Prominent Hill and West Musgrave mines . The share price fell 1.33 per cent.  

BHP and Rio Tinto retreated following drops in iron ore and copper prices in the wake of the Chinese property market’s first setback in six and a half years. BHP dropped 2.08 per cent and Rio Tinto 1.46 per cent.

Other prominent declines included Wesfarmers -0.85 per cent, CSL -0.9 per cent and Woolworths -0.45 per cent.

Aerial mapping group Nearmap slid 3.59 per cent towards a fifth straight loss since releasing disappointing contract growth targets.

AusNet dipped 1.73 per cent as its shares traded ex-dividend.

Other markets

Asian markets largely marked time following last night’s flat session on Wall Street. The Asia Dow added 0.24 per cent, China’s Shanghai Composite 0.11 per cent and Hong Kong’s Hang Seng 0.14 per cent. Japan’s Nikkei eased 0.01 per cent.

S&P 500 futures edged up four points or 0.1 per cent.

Oil regained momentum after a mixed night session. Brent crude climbed 44 US cents or 0.54 per cent to US$82.49 a barrel.

Gold held steady at US$1,866.60 an ounce.

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