Share market has dipped from record high as iron ore miners slip

Australian shares slipped from their record highs on Monday as iron ore miners slipped and fresh inventories data fuelled fears that GDP growth had contracted during the December quarter.

At the close of trading, the benchmark S & P/ASX200 index had retreated 0.1 per cent, or 9.8 points, to 7735.8, while the broader All Ordinaries also fallen 0.1 per cent to 7996.5.

Early in trading, the ASX200 reached an intraday high of 7,769.1, before easing after business indicators data, released by the Australian Bureau of Statistics, showed private firms inventories slipped 1.7 per cent during the December quarter.

JP Morgan economist Tom Kennedy said the figures inferred “a much larger drag on aggregate GDP than anticipated”, but added the fall in inventories would be offset by higher trade and consumption.

“We now forecast slightly stronger government spending and net export outcomes,” Mr Kennedy said.

The Australian dollar was lower, buying US65.19c.

Josh Gilbert, market analyst at eToro, said after equities in Australia and abroad had reached all time highs, there was likely to be a profit taking.

“When you’ve got risk-on assets that are all trading at record highs … if we do start to see a pullback, that’s quite healthy,” Mr Gilbert said.

Following on from profit season, Mr Gilbert said the focus for investors would increasingly shift back toward the macroeconomic outlook.

“Looking towards inflation, looking towards rates, looking towards the election in the United States, I think there’s a lot of risks in terms of this current rally,” he added.

Four of 11 industry sectors finished in the green with interest rate sensitive real estate stocks the best performers, up 1.3 per cent, as softer than expected US manufacturing data bolstered bets that the Federal Reserve will cut rates before mid-year.

Sector heavyweights Goodman Group added 2.3 per cent to $31.19, Scentre added 1.9 per cent to $3.21, and Charter Hall firmed 2 per cent to $12.85.

Gold stocks also surged to a near two-month high following the data print, with Northern Star Resources vaulting 6.3 per cent to $13.72, Perseus Mining adding 6.3 per cent to $1.87, and Evolution Mining climbing 4.4 per cent to $3.09.

Elsewhere in commodities, iron ore miners weighed on the benchmark as futures on the Singapore exchange for the April contract slipped 0.5 per cent to $US112.65 a tonne.

BHP slipped 1.5 per cent to $44.23, Rio Tinto sank 1.2 per cent to $123.41, and Fortescue fell 3.2 per cent to $25.36.

Over the weekend, members of the OPEC+ oil cartel extended voluntary supply cuts through to the end of June in an attempt to shore up prices which have dwindled even as geopolitical tensions have heightened in the Middle East.

Brent crude, the international benchmark, neared $US83.50 a barrel while its US equivalent, West Texas Intermediate was just below $US80 a barrel.

In company news, Downer lost 1.2 per cent to $4.96 after it filed counterclaims against a shareholder class action. The construction firm said its auditors KPMG, were in-part to blame for accounting irregularities.

Lake Resources sunk 11.1 per cent to 12c even as the lithium miner announced it was cutting nearly 50 per cent of its workforce.

Renewables developer Genex Power soared 32.4 per cent to 25c following a $381m takeover bid from Japanese stakeholder J-Power.