ASX slips as retail sales dip offsets energy sector rally

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ASX slips as retail sales dip offsets energy sector rally
Credit: © Reuters.

The Australian sharemarket closed lower on Thursday, primarily due to a decline in consumer stocks following an unexpected drop in monthly retail sales figures. The S&P/ASX 200 index decreased by 0.1%, or 5.5 points, settling at 7,024.8 by the end of the trading session.

The data showed that retail activity last month slowed to 0.2% from July’s increase of 0.5%, reinforcing the case for the Reserve Bank to hold the cash rate at 4.1% when it meets next week. ANZ economists Adelaide Timbrell and Madeline Dunk said in a note to clients that the data supported the likelihood that the Reserve Bank would leave the cash rate unchanged next Tuesday, with the “RBA appearing comfortable to continue its extended pause”.

Consumer stocks were particularly affected by this slowdown in retail activity. The consumer discretionary sector recorded the sharpest loss, down 1.2%. IDP Education dropped 3.5% to $20.95, Aristocrat Leisure slid 1.9% to $40.64 and Wesfarmers fell 0.8% to $52.65.

The consumer staples sector also felt the impact, led by a 0.9% decline by ASX heavyweight Woolworths which closed at $37.27 a share, while rival Coles slid 0.7% to $15.6 and dairy producer A2 Milk declined 2.1% to $4.19.

Despite consumer stocks' downturn, the energy sector rallied on Thursday, up by 2.96% with Whitehaven Coal (ASX:WHC) leading the way, closing 6.06% higher at $7.35. Shares in ResMed (ASX:RMD) and Karoon Energy (ASX:KAR) also performed well.

In other markets, Japan's Nikkei lost 1.54%, Hong Kong's Hang Seng lost 1.18%, while China's Shanghai Composite gained 0.22%.

In commodities, gold is trading at US$1,892.70 an ounce and Iron ore is 0.8% higher at US$118.30 a tonne. Light crude is trading $0.73 higher at US$94.41 a barrel.

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