The ASX200 pulled back from a new all-time high, losing 51.2 points or 0.61% to 8,322.80.
There was broad weakness in the sectors, with Energy, Industrials, Consumer Discretionary, Comm Services and Real Estate all losing more than 1%.
Health Care managed a small 0.12% uptick, with Utilities being the standout, lifting 0.36% despite the dour atmosphere.
Origin Energy lifted 0.65% and mid-cap Contact Energy notched a 4.99% share price gain.
Comm Services was the worst-hit sector, down 1.25%. Telstra led the sector down with a 1.78% loss, followed by TPG Telecom (BCBA:TECO2m) (-2.54%) and REA Group (-1.16%).
The bottom-performing stocks were Neuren Pharmaceuticals (-7.70%) and New Hope Corporation Limited (-3.74%).
In the last five days, the ASX200 has gained 1.58% and sits 1.46% off its 52-week high.
ASX outpacing seasonal returns
Moomoo Australia market strategist Jessica Amir joins us to discuss the ASX’s trajectory and forward outlook.
Investors, afraid of missing opportunities, are buying any dip in the market.
Overnight, the Nasdaq rose more than 1%, with Nvidia shares climbing 4.9% ahead of the world’s biggest chipmaker releasing results that could move its stock by 8% (and drive markets) in either direction.
Tesla’s stock gained 2%, boosting Elon Musk’s wealth by US$12.9 billion in a single day, ahead of SpaceX launching its fourth flight of the year. And gold and palladium surged as Russia’s war against Ukraine intensifies.
The Aussie share market hit its highest level in history yesterday, reaching 8,446 points. It is now up 10.3% this year. We're expecting new records to be set for the remainder of the year and into the next.
The ASX 200 is already outpacing typical November returns, gaining 2.6% so far this month. This compares to the 0.5% average gain for November over the past 20 years or the 1.8% average seen over the past decade.
So why could higher levels lie ahead for Aussie shares?
Many reasons.
Australia’s economy is growing stronger than expected, company earnings growth forecasts are being upgraded for next year and Bitcoin has hit a new record, benefiting our biggest tech company, Block.
Additionally, the US dollar has fallen for the second consecutive day. More pressure is likely to ease off the USD, which could push commodity prices higher, allowing them to explore new territory.
This will likely drive commodity stocks up, broadening Australia’s share market rally.
So far this month, technology stocks have delivered the best returns, with shares such as Block, Technology One and Megaport gaining 20%.
But with copper, gold and iron ore prices rebounding from their lows, shares in Australia’s big miners will likely start to rally, supporting the market in moving to even higher levels.
Finally, consider that FOMO is real, just like the Santa rally. We’re entering what is traditionally the best period for share market returns, with stocks historically rallying from November to February.
That said, there’s always the risk of a pullback in markets. Rising tensions in the Russia-Ukraine war could make investors jittery. However, markets have weathered similar challenges in the past and this time shouldn’t be any different.
Small cap movers
Movers in the small-cap sector included Lightning Minerals Ltd (ASX:L1M), which was 22.86% higher at $0.086, while Element 25 Ltd (ASX:E25, OTCQX:ELMTF) climbed 24% to a daily high of $0.31.
Lumos Diagnostics Ltd hit $0.035, a 16.67% gain on the previous close, Alto Metals was as much as 16.46% higher to $0.092, Yandal Resources Ltd (ASX:YRL) posted another gain, up as much as 5.48% to $0.385 and Sovereign Metals Ltd (ASX:SVM, OTC:SVMLF, AIM:SVML) increased as much as 3.95% to $0.79.
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