ASX 200 afternoon report: 12 December 2024

The ASX 200 trades 19 points (-0.23%) lower at 8333 as of 3.00pm AEDT.

ASX 200 retreat deepens

The ASX 200 hit its lowest point in three weeks this afternoon as it extended its retreat from its record high of 8514.5 in early December. Its fall today came as markets reassessed the likelihood of a Reserve Bank of Australia (RBA) interest rate cut in February following a solid November jobs report.

Strong November jobs report

The Australian economy added 35,600 jobs in November, stronger than the 25,000 gain the market had expected. The unemployment rate fell to 3.9% from 4.1%, defying expectations for a rise to 4.2%.

The robust November jobs report indicates that the labour market is more resilient than many expected, including the RBA. The unemployment rate, at 3.9% in November, is well below the RBA’s December forecast of 4.3%.

Impact on RBA rate cut expectations

While the jobs numbers dent hopes for an RBA rate cut in February, the situation remains in the balance after the recent tepid third quarter (Q3) gross domestic product (GDP) reading prompted an RBA dovish pivot, noting it was gaining confidence that 'inflationary pressures are declining.'

To that end, there will be an intense focus on incoming consumer and business confidence surveys:

• December labour force reports on Thursday, 16 January 2025
• Fourth quarter (Q4) consumer price index (CPI) on Wednesday, 29 January 2025
• RBA’s first Board meeting of 2025 on Tuesday, 18 February 2025.

Before the jobs data was released, the Australian rates market priced in a 63% chance of a 25 basis point (bp) RBA rate cut for February. The probability of a rate cut in February has eased well below about 40%, with Australian bond yields moving 9 bp to 11 bp higher across the curve.

ASX 200 stocks
Property sector

The interest rate-sensitive property sector declined.

• Mirvac Group slipped 2.16% to $2.04
• Domain Holdings Australia lost 1.72% to $2.58
• REA Group fell 1.57% to $238.86
• Scentre edged 1.13% lower to $3.51

Consumer discretionary sector

The ASX 200 consumer discretionary sector fell from last week's record high.

• Baby Bunting dived 4.5% to $1.71
• Adairs slipped 2.14% to $2.75
• Premier Investments lost 2.1% to $34.17
• Domino's Pizza fell 1.9% to $29.94

Mining sector

The big miners have consolidated gains from earlier in the week.

• Mineral Resources rose 0.22% to $36.63
• Fortescue Metals Group added 0.25% to $20.15
• Rio Tinto gained 0.1% to $123.94
• BHP Group fell 0.5% to $41.78

Banking sector

• Macquarie gained 0.88% to $227.06
• National Australia Bank (NAB) gained 0.1% to $37.62
• Australia and New Zealand Banking Group (ANZ) lost 0.22% to $29.03
• Westpac edged 0.2% lower to $32.05

Energy sector

The beleaguered ASX 200 energy sector, down more than 20% in 2024, had a better day after crude oil rebounded above $70 overnight. The European Union's (EU) approval of new sanctions on Russian oil supported the recovery.

• Beach Energy soared 8.4% to $1.31
• Viva Energy added 1.91% to $2.67
• Ampol gained 0.4% to $27.46

Health care sector

• Pro Medicus rose 3.15% to $254.92
• Cochlear fell 0.88% to $290.78
• Ramsay Health Care lost 0.9% to $37.60

ASX 200 technical analysis

The ASX 200 has extended its pullback from its record 8514.5 high and multi-week trend line resistance. The index appears set to close today below the neckline of a head-and-shoulders topping pattern at around 8350.

Presuming the ASX 200 does post a daily close below the neckline at about 8350, it triggers the topping pattern and projects a move lower initially to uptrend support at 8265 before 8200.

ASX 200 daily chart

• _{Source: TradingView. The figures stated are as of 12 December 2024. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation.}