The ASX was swingin’ harder than Frank Sinatra and Dean Marttin today. Higher early, before crashing and then clawing back some losses.
In the end, the S&P/ASX200 fell 13.00 points or 0.18% to 7,205.30. The index has lost 1.49% for the last five days, but sits 4.79% below its 52-week high.
The bottom-performing stocks in this index are Link Administration Holdings Ltd and Imugene Ltd (ASX:IMU, OTC:IUGNF) down 5.81% and 4.24% respectively.
Looking at the sectors, Materials and Healthcare led the way up 0.97% and 0.83% respectively. Energy was the biggest loser down 1.17%.
Data day: business confidence and consumer sentiment
The National Australia Bank Business Confidence survey was released today.
The survey indicates the performance of the overall Australian economy in a short-term view. A positive economic growth anticipates bullish movements for the AUD, whereas a negative growth is seen as bearish.
The report shows business conditions remained resilient rising 2 points in August, despite a slowing economy.
Trading performance, profitability and job numbers experienced a widespread increase across various industries.
Alan Oster, chief economist at NAB, indicated that although business confidence and future orders have shown slight improvements, they still linger below the average benchmark. This subdued performance is primarily attributed to persistent challenges within the retail sector.
The current results were significantly influenced by car retail and personal and household goods sectors, which experienced a stabilisation in their order books as backlogged orders were fulfilled.
Cost metrics in the survey highlighted sustained elevated levels. While labour cost growth saw a decrease from its July spike, it remained notably high at 3.2%. Meanwhile, the cost of purchases also stayed elevated, registering at 2.9% for the month.
Inflation in both the retail and services sectors showed a deceleration this month but still persisted at elevated levels.
"The survey results for August suggest the economy has remained resilient into the third quarter," Oster concluded.
Westpac got into the action on the consumer side with The Westpac-Melbourne Institute Index of Consumer Sentiment, which showed sentiment slipped 1.5% to 79.7 in September from 81.0 in August.
There is still pessimism in the community, despite waning fears of further interest rate rises.
Confidence among mortgage holders surged 7.8% last month, although this uplift was neutralised by a 6.1% dip in renter confidence and a 5.8% decline among outright homeowners. Bill Evans, chief economist at Westpac, noted, "The strong message from survey detail is of ongoing intense pressures on family finances."
Simultaneously, the Australian dollar saw a 0.9% hike to US64.31¢ on Monday, marking its most significant daily rise in six weeks. This rebound comes after Chinese authorities intensified their efforts to stabilize the weakening yuan.
The People's Bank of China issued a statement warning of decisive action against "one-way and pro-cyclical" market bets. "We estimate that the recent sharp lift in the US dollar against the yuan is out of line with fundamentals," stated Kristina Clifton, a senior economist at the Commonwealth Bank of Australia (ASX:CBA).
Currently, the yuan is fluctuating around 7.30 per US dollar, with CBA estimating a fair value between 6.72 and 7.02 per US dollar.
"The risk lies towards another weaker than expected monthly Chinese 'data dump' on Friday and renewed yuan weakness," Clifton added.
The Australian dollar often serves as a liquid proxy for the yuan, given China's status as Australia's largest importer of commodities.
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