Australian shares are expected to continue to weaken today, following the direction of Wall Street after an unexpected rise in United States inflation unnerved investors.
They looked to set to track U.S. equities lower with the share price index (SPI) futures quoted 55 points (0.7%) weaker at 8,346 at 0920am (AEDT).
The Dow Jones Industrial Average and the S&P 500 each dropped 0.5% and the Nasdaq Composite fell 0.6% on Thursday (Friday AEDT), undermined by wholesale prices rising more than expected in November which may indicate inflation will be tougher to curb.
The U.S. Bureau of Labor Statistics reported on Thursday that the Producer Price Index increased by 0.4% for the month, beating expectations of 0.2%.
The S&P/ASX 200 index dropped 0.3% to 8,330.3 on Thursday after falling to new three-week lows as strong jobs figures reduced expectations of an early interest rate cut by the Reserve Bank of Australia.
The benchmark Australian index has lost about 1.7% over the last five days.
Burrell Stockbroking wealth adviser Adam Dight said market players were “scratching their heads” about the different performance of Ventia Services Group (ASX: VNT) which fell 23% and Downer Group (ASX: DOW) which dropped 6% on Thursday.
The Australian Competition and Consumer Commission earlier announced it had launched legal action against the two companies over alleged price fixing.
“How does it happen that one stock is crunched and the other is a bit wobbly,” Dight said.
He also said those expecting an February interest rate cut in Australia were disappointed when the jobs data was released yesterday.