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Share trade turned risk-averse amid unrest in China as financial markets got back down to business following the US Thanksgiving holiday.

The S&P/ASX 200 fell 31 points or 0.43 per cent by mid-session.

Resource stocks led the selling. Traditional defensive sectors shielded the market from a deeper fall.

What’s driving the market

Last week’s relaxed holiday mood evaporated amid questions about the outlook for China following rare shows of civil disobedience across the weekend. Protestors took to the streets to call for an end to Covid lockdowns following deaths in an apartment block fire.

Protests against Covid restrictions in China have seemingly intensified following a fire which killed 10 people in an apartment block in Urumqi. The BBC reported thousands of people took to the streets of Shanghai to remember the victims and demonstrate against restrictions. Many were heard calling for President Xi Jinping to resign,” NAB currency strategist Rodrigo Catril said.

Chinese shares tumbled this morning. The Hang Seng index skidded 3.7 per cent. The Shanghai Composite shed 1.5 per cent.

US equity futures fell in late Sunday night trade following a mixed end to last week. S&P 500 futures dropped 27 points or almost 0.7 per cent.

A slow week on Wall Street finished mixed during Friday’s holiday-shortened session. The Dow climbed 0.45 per cent to its highest close since April. The Nasdaq reversed 0.52 per cent as Apple’s production woes in China weighed. The broadest of the three indices, the S&P 500, finished near flat.

Back home, the Reserve Bank issued a rare apology to Australians who took out a mortgage based on the central bank’s pandemic pledge not to raise interest rates until 2024. Governor Philip Lowe used an appearance before the Senate Economics Legislation Committee to issue a mea culpa.

“I’m certainly sorry if people listened to what we said and then acted on that and now regret what they had done,” he said.

“Looking back, we would have chosen different language. People did not hear the caveats in what we said, and my language was always caveated,” he added.

“That’s a failure on our part – we didn’t communicate the caveats clearly enough, and we’ve certainly learned from that. The community heard 2024, they didn’t hear the conditionality, and that’s partly our fault.”

Retail spending figures this morning showed the first cracks since the pandemic. Turnover declined 0.2 per cent last month, the first setback of the year.

“The October fall in retail turnover ends a run of nine straight monthly rises and suggests increased cost of living pressures including interest rate rises have started to weigh on consumer spending,” Ben Dorber, ABS head of retail statistics, said.

Going up

Traditional defensive sectors outperformed in a falling market. Agribusinesses Elders and GrainCorp advanced 2.36 and 2.23 per cent, respectively. National Storage put on 1.88 per cent, Breville Group 1.64 per cent and health insurer Medibank 1.57 per cent.

Among the heavyweights, toll road operator Transurban gained 0.95 per cent, NAB 0.44 per cent and supermarket Woolworths 0.4 per cent. Biotech CSL edged up 0.28 per cent, Telstra 0.25 per cent and Coles 0.15 per cent.

Lithium miner Pilbara Minerals firmed 0.78 per cent after announcing a joint venture with Calix to develop a “value-added lithium product”. The venture will develop a demonstration plant at Pilbara’s Pilgangoora project using Calix’s calcination technology to refine the miner’s lithium salts. Calix gained 3.12 per cent.

Coal miners rose after Newcastle prices rallied almost 1.2 per cent. New Hope gained 4.17 per cent, Whitehaven 3.86 per cent and Coronado 1.79 per cent.

Toll road operator Atlas Arteria put on 0.78 per cent following a greenlight from US regulators to acquire a 66.67 per cent stake in the Chicago Skyway.

Pallets business Brambles inched up 0.17 per cent on plans to merge its Chinese business with Loscam’s Chinese business. Loscam Greater China will acquire CHEP China for US$132.2 million. Brambles will receive shares in the combined business.  

Beauty and wellness firm BWX remained in a trading halt following a further delay in releasing full-year earnings. The company said it needed more time to evaluate offers of debt funding. Chief Financial Officer Efee Peell will exit the company.

Going down

Bank of Queensland slumped 5.16 per cent following the sudden, unexpected departure of CEO George Frazis. The bank announced it had commenced a global search for a new Managing Director and CEO after deciding “different leadership” was required to build a “stronger and more resilient bank”.

Frazis, who joined the bank in September 2019, will leave immediately. Chair Patrick Alloway will act as executive chair until a permanent replacement is appointed.

Energy producers retreated as Brent crude fell towards the lows of late September. Woodside Energy shed 3.15 per cent. Santos gave up 2.55 per cent.

A collapse in Covid testing volumes helped pull medical diagnostics specialist Healius down 3.56 per cent. The company said Covid testing had fallen from 13,000 tests per working day in July to 3-4,000 per working day last month. Year-to-date revenues were 31.6 per cent lower than the same period last year.  

City Chic Collective fell heavily for a second session since warning of margin compression amid softening demand for its plus-size clothing in the northern hemisphere. Shares in the retailer fell 20.6 per cent today, adding to a loss of 28.42 per cent on Friday.

Resolute Mining announced it had received the third and final tranche of $10 million for its Bibiani gold mine in Ghana from Assante Gold corporation. The share price eased 2.7 per cent.

Other markets

Oil added to last week’s 4.6 per cent fall. Brent crude slid US$2 or 2.4 per cent to US$81.70 a barrel.

Gold declined US$5.50 or 0.3 per cent to US$1,748.50 an ounce.

The dollar slumped 0.5 per cent to 66.77 US cents as forex traders retreated to the security of the greenback.

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