To The Moon

The Australian sharemarket fell on Tuesday, tracking broad weakness in US futures stock indices as investors turned cautious about the path of interest rates in America and Australia ahead of key labour data in the world’s largest economy.

The US will release its long-awaited combined employment reports for October and November later, following delays to data collection during the longest government shutdown in America’s history. Markets expect at least two more rate reductions by the Federal Reserve next year.

The S&P/ASX 200 eased 0.4%, or 36.1 points, to 8598.90, in the second consecutive session of losses. Of the 11 sectors, only industrials and consumer staples closed in the green.

Rate-sensitive sectors, including tech, consumer discretionary and real estate, were among the laggards after economists at two of the major banks tipped higher borrowing costs next year. The Commonwealth Bank of Australia and National Australia Bank are now tipping that the Reserve Bank will lift the cash rate at the first policy meeting on February 3.

NAB is even expecting a second rate hike in May, which would take the cash rate to 4.1%. Adding to stock market jitters was a private survey from Westpac showing that consumer sentiment slid in December on renewed angst over inflation and interest rates.

Markets now suggest a one-in-four chance of an Australian rate hike in February, with markets anticipating a total of 38 basis points of tightening by Christmas next year.

On the ASX, it was another tough session for family-tracking app Life360, the biggest laggard on the index. Its shares fell to a five-month low, following losses on the tech-heavy Nasdaq on Monday. The market darling has seen its stock price plummet 41% since hitting an all-time high in July, as investors dumped the shares, deeming the valuation too high. Shares closed 5.7per cent lower at $32.71.

Energy stocks were among the hardest-hit after oil prices fell as prospects for a Russia-Ukraine peace deal appeared to strengthen.

“This raised concerns that recent US sanctions on Russian oil companies would be ultimately lifted, adding to an already well supplied market,” said ANZ in a note.

Adding to the pressure, soft Chinese economic data released on Monday further fuelled concerns that a cooling in the world’s second-largest economy would pressure oil demand.

As a result, Brent crude futures shaved off 0.6% to $US60.21 a barrel, while West Texas Intermediate crude lost 0.5% to $US56.52.

In other commodities, the big mining groups were mixed – BHP edged down 0.1% at $44.24 and Rio Tinto inched up 0.3% to $140.30. Fortescue fell 2.8% to $22.10.

The major banks were also split, with Westpac down 1.1% to $38.48. ANZ shed 0.4% to $36.11, National Australia Bank added 0.1% to $42.24 and Commonwealth Bank closed flat at $155.13.

Among the biggest winners on the ASX were Qantas, which rallied 2.9% to $10.09 and DroneShield up an impressive 22.2% to $2.81. The surge came after the company secured a $49.6 million contract to supply a military customer. The stock has nearly tripled this year.

In other company news, REA Group fell 1.7% to $185.8 on news that Google will display real estate ads.

Southern Cross Electrical Engineering lifted 2.5% to $2.46 after it secured contract awards totalling about $90 million across data centre and rail projects in NSW.

Orica gained 2.8% to $24.360 as chief executive Sanjeev Gandhi said the 2026 financial year started strongly with continued demand for commercial explosives and blasting products.

ASX Ltd lost 2.9% to $52.09 as it became a client of registered lobbyist SEC Newgate after ASIC delivered a scathing report of the market operator on Monday.