The Australian stock market encountered a downturn on Thursday, pulling back from a recent two-month high reached during the previous session. Notably, financials and energy stocks played a significant role in dragging down the market indices, despite investor optimism regarding potential changes in the central bank's monetary policy.
Impact of GDP Data on Market Sentiment
The S&P/ASX 200 index (AXJO) experienced a 0.071% decline, standing at 7,173.30 points on Thursday, following a notable 1.7% surge on Wednesday. However, recent data from the Australian Bureau of Statistics indicated a 0.2% rise in real gross domestic product (GDP) for the September quarter. This figure fell short of the 0.4% estimate, marking the slowest growth in a year.
Sector-wise Performance Analysis
The softness in GDP growth over the last two quarters holds significance, reflecting a broader slowdown in the economy below the trend pace of growth, as highlighted by analysts at ANZ on Wednesday. The heavyweight financials (AXFJ) experienced a 0.43% drop, led by ANZ Group (ASX: ANZ) and National Australia Bank (ASX: NAB), both down by around 0.4%.
Moreover, the energy stocks (AXEJ) witnessed a significant rise of 0.25%. Woodside Energy (ASX: WDS) and Santos (ASX: STO) observed a rise of 0.44% and 0.74%, respectively.
Market Response and Analyst Insights
Gold stocks (AXGD) gained 0.18%, the metals and mining index (AXMM) rose by 0.65%, aligning with the surge in global iron ore prices. Mining giants like Fortescue (ASX: ASX:FMG) and Rio Tinto (ASX: ASX:RIO) experienced a increase of 1.59% and 1.04%, respectively.
Analysts at ANZ view the economic growth data as strengthening the case for the cash rate to remain at 4.35% for an extended period, which had a notable impact on market sentiment.
Company-Specific News and New Zealand's Market Comparison
In significant company news, BHP (ASX:BHP) Group appointed Vandita Pant as its new chief financial officer, while Fonterra Co-operative (FCG) witnessed a nearly 1% surge as it increased its fiscal 2024 earnings and farmgate milk price forecasts.
Comparatively, New Zealand's benchmark S&P/NZX 50 index .NZ50 remained stagnant at 11,453.71 points, with Fonterra Co-operative leading the positive movement.
Conclusion
In conclusion, Thursday's Australian stock market retreat reflected notable fluctuations and sector-specific performances. Despite the downturn, specific sectors, especially metals and mining, showcased resilience amid global economic factors and company-specific news.