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The share market slid towards its first loss of the week after soft US economic data reignited fears of a slowdown in global growth.

The S&P/ASX 200 gave back 67 points or 1 per cent by mid-session. Ten of eleven sectors declined as the market trimmed four days of gains.

Energy was the only sector to resist the downturn. Real estate investment trusts were the biggest weight as more than two dozen firms traded ex-distribution. Gold miners and tech stocks were also notably weak.

What’s driving the market

Wall Street turned sharply lower overnight as a collapse in consumer sentiment raised questions about the outlook for corporate earnings. The S&P 500 sank 2.01 per cent after the Conference Board’s closely-watched consumer confidence measure fell to its lowest in 16 months.

Just three stocks on the Dow rose as the blue-chip average shed 1.56 per cent. The Nasdaq Composite slumped almost 3 per cent.

With the second-quarter reporting season just weeks away, analysts fear current valuations may not reflect the deteriorating profit outlook.

“What added to investors’ concerns was the report showed inflation expectations rose to 8 per cent this month from 7.5 per cent in May,” Kunal Sawhney, chief executive of research group Kalkine, said.

“Rising inflation impacts purchasing power of consumers, and that is going to be reflected in corporate earnings in the coming quarters.”

Rate rises have yet to have a major impact on Australian shoppers. Retail sales hit a fresh high last month, increasing for a fifth straight month according to an Australian Bureau of Statistics report this morning. Turnover improved 0.9 per cent, with cafes and department stores faring particularly well.

With tax loss selling all but complete and the end of the financial year looming, attention is likely to move to next week’s Reserve Bank policy meeting. The central bank is widely expected to raise the cash rate target by 50 basis points to 1.35 per cent.

“The rebound in domestic equity markets that we saw over the last few days now seems to be over as markets start focusing on RBA’s interest rate decision due next week and the first round of corporate earnings. With just two days left for the financial year to end, fund houses are most probably done with their year-end portfolio rebalancing,” Sawhney said.

Going up

A late-morning recovery in some of the banks lifted the index off its lows. ANZ firmed 0.49 per cent, Westpac 0.48 per cent and NAB 0.32 per cent. Regional banks Bendigo and Queensland edged up 0.54 and 0.29 per cent, respectively. Commonwealth Bank lost 1.04 per cent.

Woodside Energy climbed 0.43 per cent to a two-week peak. Santos added 0.26 per cent.

News that an offtake agreement with Ford will underpin a lithium project in WA lifted Liontown Resources 3.99 per cent. Liontown will supply the US automotive giant with up to 150,000 dry metric tonnes of lithium per annum from its Kathleen Valley project.

Star Entertainment climbed 3.14 per cent on news Tyro Payments chief Robbie Cooke will join as CEO and Managing Director. Cooke has a long track record with ASX-listed companies, including Tyro, Tatts Group and Wotif.com.  

IGA operator Metcash firmed 2.87 per cent off the back of Monday’s well-received full-year result. Rail haulage firm Aurizon gained 2.25 per cent.

Coal miners New Hope and Whitehaven added 2.39 and 1.43 per cent, respectively.

Going down

The REIT sector shed 3.6 per cent as around 30 trusts traded without the right to the latest distribution. Charter Hall Long Wale dropped 7.22 per cent, Centuria Industrial REIT 5.78 per cent and Stockland 5.96 per cent. Goodman gave up 4 per cent.

Gold miners tracked a two-week low in the yellow metal. Silver Lake Resources wilted 7.78 per cent, Regis 6.01 per cent and Perseus 5.88 per cent. Newcrest lost 2.73 per cent.

Other notable heavyweight declines included CSL -2.06 per cent, Wesfarmers -1.62 per cent and Telstra -1.15 per cent.

The unexpected departure of CEO and Managing Director Robbie Cooke drove payments firm Tyro down 16.67 per cent to an all-time low. Cooke led the company for five years, guiding the firm through listing in 2019. Cooke will join Star Entertainment Group (see above).  

Carsales.com declined 9.55 per cent after raising $842 million from investors to help fund the purchase of Trader Interactive. The Australian classifieds outfit will pay $1.172 billion to acquire the 51 per cent of the US platform it does not already own.

Other markets

A red morning on Asian markets saw the Asia Dow lose 0.86 per cent, China’s Shanghai Composite 0.57 per cent, Hong Kong’s Hang Seng 1.19 per cent and Japan’s Nikkei 1.06 per cent.

US futures were little changed after last night’s rout. S&P 500 futures were recently ahead four points or 0.1 per cent.

Oil declined ahead of tonight’s OPEC+ policy meeting. Brent crude eased 73 US cents or 0.6 per cent to US$117.25 a barrel.

Gold bounced US$2.40 or 0.13 per cent to US$1,823.50 an ounce.

The dollar strengthened 0.17 per cent to 69.15 US cents.

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