Australian stocks are poised for their worst 10-week performance as investors await the release of crucial Consumer Price Index (CPI) data. Despite a slight uptick on Friday, the S&P/ASX 200 index is on track to record its most challenging week since late October, with a 1.1% decline following five consecutive weekly gains.
The upcoming monthly inflation report for November is attracting significant attention as it will serve as a critical indicator for Reserve Bank of Australia’s (RBA) monetary policy decisions in the coming year. Speculation abounds that the RBA may initiate monetary easing around May or June, even though it currently maintains a nominal tightening bias.
Globally, market participants have tempered their expectations of multiple interest rate cuts by the US Federal Reserve this year. The cautious sentiment surrounding these developments is adding to the anxiety surrounding the Australian stock market.
On Friday in Sydney, there was a notable surge in bank stocks, with gains of 0.5%. However, they are still on course for their first weekly decline since mid-November. Commonwealth Bank of Australia witnessed a 0.7% increase, while Westpac saw a marginal rise of 0.1%.
In the gold sector, stocks rebounded by 0.8% after four consecutive sessions of losses, benefiting from a recovery in bullion prices. Northern Star Resources and Evolution Mining gained 0.9% and 0.8%, respectively.
Unfortunately, the tech sector experienced a third consecutive session of declines, falling by 1.3% and heading for its worst week since mid-October. Major player Xero fell by 1.1%, while WiseTech Global lost 1.6%.
Investors and analysts will eagerly await the release of the inflation report to gain a clearer understanding of the potential monetary policy decisions of the RBA. The outcome of this report could have a significant impact on the Australian stock market’s future trajectory.
As Australian stocks face their most challenging period in the last 10 weeks, investors will closely monitor the CPI data and the subsequent actions of the RBA. Uncertainty surrounding monetary policy decisions and global economic conditions continues to weigh heavily on market sentiment.
The Australian stock market’s performance in the coming weeks will be influenced by various factors, including inflation levels, market expectations, and global economic trends. Keeping a watchful eye on these developments will be crucial for investors navigating this uncertain landscape.
