THE sharemarket closed in the red yesterday after a rise in unemployment put further pressure on investors already holding their breath before last night's euro zone debt crisis summit.
The benchmark S&P/ASX 200 Index lost ground, dropping 11.8 points, or 0.27 per cent, to 4280.7.
A loss of 40,000 full-time jobs in November pushed the local unemployment rate to 5.3 per cent, up from 5.2 per cent in October.
Economists said the job losses were in line with Reserve Bank and Treasury forecasts, as hiring intentions, restrained by Europe's political crisis, fed through to employment. Part-time employment rose by 33,600.
"There's been a phenomenal shift over the last year towards lower levels of jobs and labour force growth," Commonwealth Bank senior economist Michael Workman said.
"It confirms that the employment market has been significantly softer over the last four to five months than it was at the start of the year, and the end of last year.
"It implies that the unemployment rate is going to drift a little bit higher over the next few months."
Energy stocks weighed heavily on the market, with the sector losing 1.5 per cent. Woodside Petroleum, the country's second-biggest oil and gas producer, dropped 76?, or 2.3 per cent, to $32.90, despite approving development of a $2.5 billion project off north-western Australia.
The positive news came after three land acquisition notices were declared invalid by the WA Supreme Court.
Oil and gas producer Santos lost 52?, or 3.9 per cent, to $13.
The financial sector lost 0.3 per cent after news that two of the big four banks ANZ and NAB had agreed to pass on the Reserve Bank's interest rate cut in full. NAB gained 21?, up 0.9 per cent, to $24.61. ANZ lost 11?, or 0.5 per cent, to $21.13.
The healthcare sector fell 0.9 per cent.
Investors were biding their time before the euro zone leaders' summit last night our time for signs the region's debilitating debt crisis will be resolved. But with the region's two major economies Germany and France forcing the others to subject themselves to severe cutbacks in spending and tax rises, the predicted drawn-out crisis has markets pushing for more rate cuts.
"Markets are still very keen on another four (25-basis-point) rate cuts by the middle of next year," Mr Workman said.
Market turnover was 2.49 billion shares worth $4.39 billion.
The price of gold in Sydney closed at $US1737.47 an ounce, up $US8.84.
Frequently Asked Questions about this Article…
How did the rise in unemployment affect the ASX 200 share market?
The article says a rise in unemployment helped push the benchmark S&P/ASX 200 down by 11.8 points (0.27%) to 4280.7, as investors reacted to the loss of 40,000 full-time jobs in November and an increase in the unemployment rate from 5.2% to 5.3%.
Why did energy stocks weigh on the market and how did Woodside Petroleum react?
Energy stocks fell 1.5% overall. Woodside Petroleum dropped about 2.3% to $32.90 despite approving a $2.5 billion development off north‑western Australia; the WA Supreme Court also declared three land acquisition notices invalid, which the article describes as positive news for Woodside.
What happened to Santos shares and the oil and gas sector performance?
According to the article, oil and gas producer Santos fell 3.9% to $13, contributing to weakness in the energy sector on the day.
What does it mean that ANZ and NAB 'agreed to pass on the Reserve Bank's interest rate cut in full'?
The piece reports that two of the big four banks, ANZ and NAB, agreed to pass the Reserve Bank's interest rate cut on to customers in full, which means they implemented rate reductions that reflect the RBA cut rather than absorbing it, a move that influenced the financial sector (which fell 0.3%).
How did the euro zone debt crisis summit influence investor sentiment?
Investors were cautious ahead of the euro zone leaders' summit, according to the article, as uncertainty around the region's debt crisis and proposed spending cuts and tax rises in countries pressured markets and increased demand for additional rate cuts.
What did economists say about recent jobs data and future unemployment trends?
Economists told the article that the 40,000 full‑time job loss was in line with Reserve Bank and Treasury forecasts. Commonwealth Bank senior economist Michael Workman said the employment market had softened over the last four to five months and implied the unemployment rate was likely to drift a little higher over the next few months.
What did the article report about market turnover and what does that mean for investors?
The article states market turnover was 2.49 billion shares worth $4.39 billion. Higher turnover can indicate active trading and investor caution or repositioning, while lower turnover may signal less conviction—here it reflects the busy trading day amid economic and global uncertainty.
Did commodity prices show any movement, specifically gold?
Yes. The article reports the price of gold in Sydney closed at US$1,737.47 an ounce, up US$8.84, which the piece links to cautious investor sentiment ahead of the euro zone summit.
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