Australian Shares Hit Four-Week Low Amid Profit-Taking

For the week, the ASX200 experienced a 1.5% decline, its worst performance since early August, indicating a second consecutive week of losses. According to AMP’s chief economist, Shane Oliver, traders have been cashing in on profits following a strong upward run, compounded by concerns that stock valuations may have outstripped expectations for earnings in 2025. Despite this, Oliver remains optimistic about the overall upward trend for Australian shares, albeit with a forecast of increased volatility in the coming year.

Historically, December tends to be a favorable month for the market; however, Oliver notes that the first half is often sluggish before a rally typically occurs in the lead-up to Christmas. “But of course, it’s not guaranteed,” he cautioned.

On Friday, nine of the ASX’s 11 sectors ended the day lower, with energy and financials showing modest gains. The mining sector led the downturn, declining by 1.8%. Notable declines included Fortescue, which retreated 3.7% to $19.48, BHP, down 1.5% to $41.17, and Rio Tinto, which fell 2.8% to $120.72 after announcing a $2.5 billion investment to expand its Rincon lithium mine in Argentina.

Gold miners also faced challenges, as the price of gold hovered around $2,688 an ounce. Northern Star dropped 1.9%, while Evolution fell 3.6%.

In the financial sector, Insignia Financial surged 6.2% to a two-and-a-half-year high of $3.61 after revealing it received a tentative $2.7 billion takeover offer from Bain Capital. The long-established company, previously known as IOOF Holdings, is evaluating whether to engage with Bain’s $4-per-share proposal.

The performance of the big four banks was mixed: Commonwealth Bank rose 0.4% to $158.21, and Westpac gained 0.7% to $32.17 during its annual general meeting, while ANZ remained flat at $29.13 and NAB dipped slightly by 0.1% to $37.57. IRESS also saw a positive turn, climbing 7.4% after reaffirming its guidance for the 2023/24 financial year.

In retail, Premier Investments fell 0.8% to $33.91, as chairman Solomon Lew acknowledged that while Black Friday and Cyber Monday sales were challenging, they did not disappoint.

On the currency front, the Australian dollar traded at 63.58 US cents, down from 64.18 US cents at the previous day’s close.

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