ASX Market Update: Scentre Drag, Asset News

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Post on Nov 07, 2024

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ASX Market Update: Scentre Drag, Asset News

The Australian share market finished the week on a mixed note, with the ASX 200 closing down 0.1% on Friday. While Scentre Group (SCG) continued to weigh heavily on the index, positive news from the resources sector provided some support.

Scentre Group Weighs on Market

Scentre Group, the owner and operator of Westfield shopping centres, remained under pressure this week, falling 3.5% on Friday. This followed news that the company had sold a stake in its flagship Sydney CBD property for $1.2 billion. The sale, while positive for investors in the short term, highlighted the ongoing challenges facing retail landlords as consumer spending patterns shift.

Analysts are concerned that the sale signifies a lack of confidence in the retail sector and could lead to further asset sales in the future. The broader retail sector also performed poorly this week, with Wesfarmers (WES) and Woolworths (WOW) both falling by over 1%.

Resource Sector Provides Support

In contrast to the weak retail sector, the resource sector continued its strong performance, buoyed by rising commodity prices. BHP Group (BHP) and Rio Tinto (RIO) both gained over 1% on Friday. This positive sentiment was also reflected in the energy sector, with Woodside Energy (WDS) and Santos (STO) both closing higher.

Other Key Market Developments

• Fortescue Metals (FMG) announced a $5 billion share buyback program, sending its shares soaring by 5.5%.
• Telstra (TLS) reported stronger-than-expected earnings for the first quarter, with its shares gaining 1.3%.
• Qantas Airways (QAN) announced a reduction in its capacity for the remainder of the year, citing concerns over global economic uncertainty.

Outlook for Next Week

The upcoming week is likely to be dominated by inflation data releases in both Australia and the US. The Reserve Bank of Australia is expected to keep interest rates on hold at its meeting next week, but investors will be closely watching for any hints on future rate decisions.

Meanwhile, the global economic outlook remains uncertain, with concerns over a potential recession looming large. This uncertainty is likely to continue to weigh on the Australian share market in the near term.

Overall, the ASX 200's performance this week reflects the ongoing challenges facing the Australian economy. While the resource sector continues to perform well, other sectors such as retail are struggling. Investors will need to be cautious in the coming weeks as they navigate the global economic headwinds and assess the impact of potential interest rate hikes.