The ASX 200 index has seen a decline, trading lower at 8159 as of 3:00 PM AEDT on October 31, 2024. This decline marks a continuation of a challenging month, with the index poised to finish October approximately 1.3% lower after reaching a record high of 8384 just two weeks prior.
The market's current trajectory reflects growing economic concerns, particularly in light of upcoming significant events, including the US elections and interest rate decisions from the Reserve Bank of Australia (RBA), the Bank of England (BoE), and the Federal Reserve (Fed). Additionally, the National People's Congress Standing Committee (NPCSC) meeting is anticipated to reveal details regarding China's fiscal stimulus package, which could have implications for global markets.
In the lead-up to the RBA meeting, where rates are expected to remain unchanged at 4.35%, recent retail sales data has raised eyebrows. Retail sales for September showed a modest increase of just 0.1% month-on-month, falling short of the 0.3% forecast. This follows a more robust 0.7% rise in August, which was largely attributed to favorable weather conditions. The sluggish retail sales growth underscores a cautious consumer sentiment, suggesting that households are tightening their belts amid economic uncertainty.
The retail sector is grappling with significant challenges as cost-of-living pressures weigh heavily on consumers. Woolworths has been particularly affected, with its share price dropping 2.3% to $30.10, extending a 6.1% decline from the previous day following a profit warning. The company has reported a shift in customer purchasing behavior, with consumers opting for lower-margin items as they navigate rising living costs. This trend highlights the broader economic pressures that are influencing consumer spending patterns across the country.
In contrast, Coles has managed to avoid a profit warning despite acknowledging the ongoing challenges posed by cost-of-living pressures. In its first-quarter update, Coles reported that its sales growth remained broadly in line with expectations, indicating a degree of resilience in its operations. The company has committed to investing in lower prices and promotions to support sales, reflecting a strategic response to the current economic climate. However, Coles' share price also experienced a slight decline, slipping 1.02% to $17.52, as the retail sector continues to navigate a complex landscape.
The mining sector has shown varied performance, with Mineral Resources standing out after its share price surged 10.8% to $39.98. This increase follows the company's agreement to sell its oil and gas assets in Western Australia to Gina Rinehart’s Hancock Prospecting, a move that alleviates some balance sheet pressure. The deal comes at a critical time for CEO Chris Ellison, who is currently under investigation for a tax evasion scheme. Meanwhile, other major players in the sector experienced slight fluctuations, with Fortescue gaining 0.5% to $19.28, while BHP and Rio Tinto saw declines of 1.14% to $42.62 and 1.06% to $118.98, respectively.
As the banking sector gears up for the release of quarterly reports next week, major banks have shown positive movements in their share prices. NAB has added 0.98% to $38.83, while Westpac rose 0.37% to $32.13. Commonwealth Bank (CBA) climbed 0.30% to $143.38, and ANZ edged up 0.06% to $31.24. This upward trend in bank stocks suggests a degree of investor confidence ahead of the earnings announcements, despite the broader economic uncertainties that have impacted other sectors.
The energy sector has not been immune to the prevailing economic pressures, with AGL Energy experiencing a significant decline of 5.47% to $10.54. This drop follows a downgrade from an Australian broker, who highlighted the risks associated with the expiration of AGL's cheap coal and gas supply contracts.