The first ASX session under the government of Anthony Albanese began strong enough, but investors seem to have lost their appetite amid an alarming set of global influences.
The ASX 200 rose 50.4 points – or 0.7 percent – on Monday morning to a high of 7,196.0 after the federal election last weekend yielded a clear result in favor of Labor.
But the local market soon regained its profits and was the last 0.1 percent lower to 7139.5, and large banks offset the growth of companies such as BHP, Rio Tinto and Fortescue Metals.
Shares of Commonwealth Bank fell 0.5% to $ 104.04, Westpac fell 0.8% to $ 23,385, NAB fell 0.9% to $ 30,785, and ANZ fell 0.9% to $ 25.72.
Macquarie Group also fell, losing 0.8 percent to $ 179.94.
Leadership from Wall Street has been mixed, while investors are clearly still nervous about the volatile cocktail of global inflationary pressures and Chinese control over Covid-19.
The decisive change of government in Canberra may have given investors some confidence, although traders will no doubt want to see Mr Albanese interact with a huge bench of greens and independents on energy and economics.
The Australian dollar rose to almost 71 cents after Saturday’s poll.
“While it’s still unclear how the new government will be able to fix rising inflation, one thing is clear: most voters are shifting their focus to improving daily lives amid fading fears of the virus,” IG Markets analyst Hebe Chen said.
“A miracle (one of Scott Morrison’s favorite words) is probably not a necessity in the current circumstances, but the opportunity to change is there.”
Mining reserves were strong after iron ore rose 2.5 percent to $ 134.36 a tonne, which helped China lower its target mortgage rate.
BHP rose 1.2 percent to $ 47.74, Rio Tinto rose 1.4 percent to $ 109.91, and Fortescue Metals rose 2.2 percent to $ 20.59.
Consumer giants ended up in the dump: Woolworths supermarket fell 1.3 percent to $ 34.89, rival Coles fell 0.6 percent to $ 17.78, and owner Bunnings Wesfarmers fell 0.9 percent to $ 46.33.
The local index rose 1.2 percent in the last session of the week, recording its first weekly gain since April.
Concerns about the economic recession intensified in the United States last week as a weak retail sector hit investors even harder.
The S&P 500 fell 0.7 percent on Friday, approaching bear market territory.
The Nasdaq was down 3.8 percent for the week, the seventh consecutive weekly decline, and down 28 percent since Jan. 5.
Ms. Chen said the new week could come as a new surprise to the market as more retailers prepare to report, including Costco, Best Buy and Macy’s.
Meanwhile in the technology sector Zoom, Nvidia and Alibaba will announce their earnings this week.