Australian shares ended near flat on Thursday, shedding earlier gains and underperforming stock markets elsewhere in Asia after domestic employment data showed a surprise fall of almost 30,000 jobs in December. The market, which had gained as much as 0.9 percent in early trade, gradually pared gains and finally ended down three points after the jobs report showed zero jobs growth was achieved in Australia last year.
"Domestic business conditions are tough, and inherent weakness in the housing sector is filtering through to other parts of the economy," said Savanth Sebastian, Economist, CommSec. "Over the next few months the ongoing uncertainty about the global environment is likely to ensure businesses remain cautious and as such hiring intentions will continue to be scaled back," he said.
Economists, most of which expect the Reserve Bank to cut interest rates again in February, said retailers likely axed part-time workers after a poor run-up to Christmas sales. Meanwhile, Australia's top banks are set to fire thousands of staff this year to offset low growth. The benchmark S&P/ASX 200 index fell 3.1 points or 0.1 percent to 4,214.8, according to the latest data, off an earlier high of 4,258.4.
It rose 2.3 points on Wednesday and 1.7 percent on Tuesday. New Zealand's benchmark NZX 50 index rose 0.5 percent to a two-week high of 3,264.7 points. New Zealand's annual inflation unexpectedly fell in the December quarter, giving the central bank leeway to keep interest rates at a record low. BHP Billiton rose 0.9 percent to A$37.34, a two-month high, boosted as London copper prices climbed to a four-month high, lifted by news that the International Monetary Fund was seeking to raise money to tackle the euro zone debt crisis which has weighed down financial markets for months.
Woodside Petroleum fell 1.9 percent to A$34.50 after December quarter production fell 6 percent and it maintained its forecast for production of between 73 million and 81 million barrels of oil equivalent in 2012. Ratings agency Fitch said on Thursday that the 2012 credit outlook for the Australian oil and gas sector was negative as companies battle to bring planned LNG production capacity within budget and on schedule.
"Announcements of project cost-blowouts and schedule delays will only increase," said Sajal Kishore, Director at Fitch's Energy & Utilities team. Fitch expects closer environmental scrutiny and further delays in gaining official consent. "Funding can become more difficult with increasing project execution risks, which may result in a deferral or cancellation of some proposed projects," Fitch said. Energy firm Santos gained 0.3 percent to A$13.25 after it maintained its forecast for 2012 production. December quarter production fell 9 percent, Santos said.