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ASX closes 0.7% lower: Inflation data suggests RBA may maintain cash rate in Feb

The Australian sharemarket experienced a decline, driven by falls among mining companies despite a cooler-than-expected inflation gauge. The S&P/ASX 200 dropped 0.7% to 7468 points, with the All Ordinaries following a similar trend. The benchmark index had fallen in five of the last six sessions, resulting in a 1.6% decrease since the start of the year.

The market briefly rebounded after Australia’s consumer price indicator showed a faster-than-predicted easing in November CPI, dropping to 4.3% annually from 4.9% in October. This development suggests that the Reserve Bank of Australia may maintain its cash rate in the next meeting in February.

Among the sectors, materials stocks suffered the most, falling by 2.1%, primarily due to declining iron ore prices. Iron ore futures in Singapore hit a three-week low, causing BHP, Fortescue, and Rio Tinto to drop in value.

Lithium stocks were also negatively impacted, with companies like Arcadium Lithium, IGO, and Pilbara Minerals experiencing significant declines. However, uranium stocks saw gains, driven by the US Department of Energy’s interest in establishing a domestic supply of enriched uranium fuel.

In company news, Alumina saw a substantial increase in its stock price due to plans to halt alumina production at its Kwinana plant in Western Australia. Mineral Resources acquired a 9.97% stake in Kali Metals, leading to a surge in Kali Metals’ stock price. Neometals experienced a significant jump in its stock price after securing a $30 million order from Mercedes-Benz. On the other hand, Worley shares fell following allegations against the company by an Ecuadorean tribunal, which it denied.

Futures

The Dow Jones futures are pointing to a fall of 52 points.

The S&P 500 futures are pointing to a fall of 4.25 points.

The Nasdaq futures are pointing to a fall of 3.75 points.

The SPI futures are down 47 points.

Best and worst performers

The best-performing sector was REITs, up 0.68 per cent. The worst-performing sector was Materials, down 2.1 per cent.

The best-performing large cap was GQG Partners (ASX:GQG), closing 3.24 per cent higher at $1.75. It was followed by shares in Altium (ASX:ALU) and JB Hi-Fi (ASX:JBH).

The worst-performing large cap was IGO (ASX:IGO), closing 8.05 per cent lower at $7.77. It was followed by shares in Mineral Resources (ASX:MIN) and Pilbara Minerals (ASX:PLS).

Asian markets

Japan’s Nikkei has gained 2.09 per cent.

Hong Kong’s Hang Seng has lost 0.36 per cent.

China’s Shanghai Composite has gained 0.09 per cent.

Commodities and the dollar

Gold is trading at US$2,034.70 an ounce.

Light crude is trading $0.35 higher at US$72.59 a barrel.

One Australian dollar is buying 67.02 US cents.