Gareth Aird, senior economist at the Commonwealth Bank, noted “wrong direction” not only implied higher unemployment, but steady unemployment as well.
“We suspect it’s [any direction other than down] because sideways from where we are today will not be good enough if wages and inflation are to lift so that the central bank hits its inflation target,” he said.
The local bourse jumped up to 7009.3 points when it opened on Wednesday, but started moving lower after 10.30am. It traded in a narrow band for the rest of the afternoon.
Lithium miners rallied on news the UK government plans to end sales of petrol and diesel cars by 2035, which would see electric vehicle sales surge. It also followed a spectacular rise in Tesla’s share price on NASDAQ index in the United States, up $US300 a share in two days to $US887 ($1319), which helped boost our information technology sector.
Several stocks hit record highs during the morning rally, including Coles, Afterpay, Woolworths and CSL, only to drop back from the peak to close flat or lower.
CSL tapped $321.22 but closed at $315.64, while Woolworths got up to $42.61 before closing 0.4 per cent lower at $42.22.
Information technology had the best session, booking gains of 2.1 per cent. Materials, except for gold miners, also out-performed, while building product makers Fletcher Building and James Hardie dropped 1.5 per cent and 0.1 per cent respectively. CIMIC surged 9.8 per cent to $30.93 after it announced the departure of its chief executive on Tuesday.
A small decline in the financial sector deducted the most points, as Commonwealth Bank added to the drag with a 1.2 per cent decline to $83.28 and Westpac declined 0.3 per cent