A year-end portfolio reshuffle and the worsening COVID epidemic in Sydney saw the Australian stock market take a negative turn on Wednesday, even after a strong lead from Wall Street and positive performance in major Asian exchanges .

The local banking sector weakened and lagged behind the rest of the market, with the big four banks all closing in the red.

The S & P / ASX 200 ended the day down 0.6% to 7,298.5 points, falling below 7,300 for the second time this week.

Healthcare heavyweight CSL fell 2.1% to $ 294.25 and is down $ 10 in the past three sessions. Pro Medicus fell 5.3% and Mesoblast fell 3.1%.

Travel stocks were also under pressure as a COVID outbreak in Sydney drew new interstate travel restrictions.

Flight Center fell 3.5%, Webjet fell 2.3% and Sydney Airport 2.2%.
Major miners made gains with BHP up 1%, Rio Tinto up 0.7% and Fortescue up 0.5%.

Locally, Commonwealth Bank economists predicted that the RBA would start raising rates next year, rather than 2024, as the economy recovered faster than expected.

Morgans senior adviser Simon Ferguson said the liquidity rate would have to rise significantly for investors to withdraw money from stocks and reinvest it in bank deposits.

“You will get some exodus of day traders (as soon as it starts to rise), but for real investors it will not be enough,” Ferguson said.

“Retirees really need to see 2-3% on their cash deposits and even that remains historically low. I think they are comfortable enough to be in action ”.

Australia’s subdued performance contrasted with positive sessions on Wall Street after Federal Reserve Chairman Jerome Powell said the central bank was comfortable with a temporary rise in inflation.

But U.S.-based RBC Capital Markets chief economist Tom Porcelli said he saw cracks among central bank members, with two others saying inflation was already on the rise. goal.

“If we read between the lines of (Loretta) Mester’s responses today, she may well be one of seven officials looking for a hike in 2022,” Porcelli wrote in a note to clients.

“If that guess is correct, it would mean that at least two voting members are in the 2022 hiking camp (Mester and James Bullard). This could make the voting dynamics quite interesting next year.

He described Jerome Powell’s testimony as “an hour-long political ad” and “a little worthy of being honest.”

Among the biggest moves in the ASX200 was Washington H Soul Pattinson’s 8.5% jump to an all-time high of $ 33.08 after yesterday announcing its merger with Milton Corp.



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