Australian shares off as rally fizzles out

An early rally in Australian shares fizzled out by midday, although the market at this stage looks set to end slightly higher on the week and ending four weeks of consecutive falls.

The S&P/ASX200 benchmark index was down 5.4 points, or 0.1 per cent, to 5877.8 points at 1205 AEST on Friday. It had earlier hit a high of 5921.4.

The All Ordinaries index fell 3.2 points, or 0.1 per cent, to 6066.0.

Earlier in the day the local market attempted to break the clutches of another nervous performance on Wall Street overnight, although here sentiment remains negative after failing to respond to an extremely positive set of jobs numbers on Thursday.

Treasurer Josh Frydenberg said the labour market remained “very challenging”, despite the surprise fall in the unemployment rate to 6.8 per cent.

“There is a lot of uncertainty out there in the economy – not just here in Australia but globally – and that’s a reflection of the nature of the virus,” he told Sky News on Friday.

Sectors were narrowly mixed with financials down 0.2 per cent, but energy stocks were 0.2 per cent higher after an initial rise in the oil price after OPEC said it would crack down on countries that failed to comply with output cuts.

BHP was trading 1.4 per cent higher at $37.83, but among the major banks Commonwealth was down 0.5 per cent at $64.67.

Health stocks were 0.6 per cent lower, with market heavyweight CSL down 0.7 per cent at $283.88 at 1216 AEST.

US stocks fell for a second straight day on Thursday as technology-related shares were undermined by Amazon shedding 2.3 per cent and Apple falling 1.6 per cent.

There were also concerns about a stalling US recovery after Labor Department data showed that while fewer people in the US made new claims for unemployment benefits last week, the number remained perched at extremely high levels.

The Dow Jones Industrial Average fell 130.4 points, or 0.5 per cent, to 27,901.98, the S&P 500 lost 28.48 points, or 0.8 per cent, to 3,357.01 and the Nasdaq Composite dropped 140.19 points, or 1.3 per cent, to 10,910.28.

Investsmart market strategist Evan Lucas told Sky News markets are getting nervous ahead of the November US presidential election, as they traditionally do stretching back to 1928.

“Markets get very, very volatile, that get very very sporadic and we actually also tend to see an increase in the US dollar. Barring the Aussie dollar/US dollar pair everything else is tending that way,” he said.

The Australian dollar up to 73.17 US cents from 72.65 US cents late on Wednesday.

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