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Aussie market eases to two-month low

Daily Market Update

Utilities and tech shares dragged the S&P/ASX 200 lower on Monday, as the benchmark lost 19.2 points, or 0.3 per cent, to 6,719.9 points, its lowest closing level in two months.

Real estate was the only sub-index to post a gain, led by heavyweight real estate investment trust (REIT) GPT, which gained 9 cents, or 2.2 per cent, to $4.13 after broker Citi upgraded its rating on the stock from neutral to buy. Shopping centre REIT Scentre gained 5 cents, or 1.8 per cent, to $2.79, while Vicinity Centres, half-owner of Chadstone, added 3 cents, or 1.6 per cent, to $1.86.

The four major banks were mixed, with CBA adding 43 cents, or 0.5 per cent, to $94.66, Westpac edging ahead by 2 cents, to $21.55, and ANZ gaining one cent, to $23.56, while National Australia Bank lost 26 cents, or 0.9 per cent, to $29.70.

Lithium on the rise

Lithium producers continued their recent good form, with Pilbara Minerals jumping 16 cents, or 3.5 per cent, to $4.75; Mineral Resources advancing $1.61, or 2.4 per cent, to $68.00; and Allkem gaining 27 cents, or 1.8 per cent, to $15.34. Project developer Lake Resources surged 11 cents, or 12.4 per cent, after announcing good progress at its Kachi lithium project in Argentina, which is expected to produce its first product in the very near future.

Among the heavyweight miners, BHP slipped 23 cents, or 0.6 per cent, to $37.81; Rio Tinto eased 6 cents, or 0.1 per cent, to $92.39; Fortescue Metals lost 17 cents, or 1 per cent, to $17.45; while South32 added 3 cents, or 0.8 per cent, to $3.91.

Origin Energy lost 5 cents, or 0.9 per cent, to $5.76 after announcing the divestment of its Beetaloo Basin gas project in the Northern Territory, which will see it take a loss of up to $90 million. Origin will also exit nearly all of its upstream gas exploration permits, because of what it has described as uncertain and expensive efforts to drive the projects into the production phase. However, Origin has struck deals to buy gas from producers if production ramps-up in the Beetaloo Basin. Woodside Energy was also lower, off 31 cents, or 1 per cent, to $32.43, while AGL Energy dropped 2 per cent after a major management reshuffle.

Shares in funds administrator and share registry company Link Group dropped to their lowest in three months at $3.28 after the company rejected a revised takeover offer from Canadian suitor Dye & Durham. Link shares ended the session 7 cents, or 2 per cent lower, at $3.40.

US yields punch decade highs

In the US, stocks closed higher ahead of the Federal Reserve’s two-day policy meeting later this week. The 30-stock Dow Jones Industrial Average gained 197.3 points, or 0.6 per cent, to 31,019.7, while the broader S&P 500 added 26.6 points, or 0.7 per cent, to 3,899.9 points, and the tech-heavy Nasdaq Composite Index advanced 86.6 points, or 0.8 per cent, to 11,535.

But the major market action was in the bond market, where the benchmark US 10-year Treasury note yield reached 3.5 per cent, its highest level since 2011, ahead of what is expected to be a decision by the Fed to lift interest rates by another three-quarters of a percentage point this week. Further down the yield curve, the two-year Treasury note yield reached 3.9 per cent, a 15-year high.

In commodities, Brent crude oil gained 65 cents, or 0.7 per cent, to US$92 a barrel, while West Texas Intermediate eased 12 cents to US$85.61 a barrel. Gold shed US$3.58, or 0.2 per cent, to US$1,675.15 an ounce. The Australian dollar is buying 67.27 US cents.

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