The ASX 200 started the month off with a 0.26% loss today, trimming the benchmark index’s weekly gain to 0.57%.
All eleven sectors finished in the red on Friday with Tech, Consumer Discretionary and Consumer Staples leading the declines.
The weakness on the local market follows a mixed session on Wall Street overnight, amid news of softer-than-expected US (and European) inflation data, along with the OPEC+ producers’ meeting.
Lithium in the news
Core Lithium Ltd (ASX:CXO) lost 3.6% to 27 cents per share after Citi analysts downgraded the lithium miner to a ‘sell’.
Allkem Ltd (ASX:AKE, OTC:OROCF, TSX:AKE) finished 0.64% lower as shareholders are urged to vote in favour of a $9 billion merger with US company Livent, in a deal that would create the world’s third largest lithium producer by volume. Both Allkem and New York-listed Livent have lost close to 40% since the deal was announced back in May. But proxy adviser Glass Lewis, who is supporting the deal, said the broader lithium market’s slump was behind the share price declines.
AustralianSuper has quietly built up a 5.1% “substantial holding” in lithium giant Pilbara Minerals Ltd (ASX:PLS) — the most shorted stock on the ASX with almost 21% of Pilbara shares shorted, a jump from the 7% shorted as reported in June.
Financials and Materials weight on ASX earnings
In its November Market Insight, State Street (NYSE:STT) Global Advisors explains how Australian company earnings have diverged from global markets in 2023.
In 2023, the Australian market has seen earnings downgrades of -7.2%, heavily influenced by the top 10 index weights. Downgrades in financial and material stocks have had a large impact on the overall Index due to the highly concentrated nature of the benchmark.
In contrast, the MSCI World Index (MSCI World) has seen small upward earnings revisions of +3.7% in 2023 also driven by the top 10 mega cap names.
Read more: Local earnings trend lower due to large weights to Financials and Materials
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