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The Australian sharemarket fell for the third day in a row as major banks warn Aussies about the ongoing cost of living pressures.
The benchmark ASX 200 index fell by 0.74 per cent, or 56 points, to finish the session at 7547.7 points.
The broader All Ordinaries also dropped 12.5 points, or 0.16 per cent, to close at 7847 points.
Nine of 11 sectors were in the red when markets closed on Tuesday, with the tech sector faring the worse by dipping by 1.3 per cent.
The financial sector also suffered falling 1.2 per cent after some major banks announced surprising mid yearly results.
Many companies continued to release half yearly results on Wednesday, as reporting season is well and truly in full swing.
The Commonwealth Bank recorded a cash profit of $5bn, which was three per cent lower than previous six month period in 2023.
CBA chief executive Matt Comyn said the dip comes off the back of a challenging period marred with cost of living pressures.
“The fundamentals of the Australian economy remain strong,” he said.
“We recognise though that all households are feeling the impact of higher inflation and higher rates.
“Our base case remains a soft landing and we expecting these pressures to ease as inflation and interest rates start coming down later this year.”
The announcement resulted in CBA shares falling by 1.86 per cent to $113.84 at the close on Wednesday.
Saxo Asia Pacific senior sales trader Junvum Kim said while CBA had a cautious outlook for this year, their higher dividend payout – which was announced on Tuesday would be $2.15 per share – is seen as attractive.
“A lower cash profit for CBA on the back of a declining net interest margin – a sub-2 per cent margin flags concerns about lacklustre consumer sentiment amid sticky inflation, in addition to heightened competition,” Mr Kim said.
Meanwhile, AMP recorded a net profit after tax of $196m in the 12 months to December 2023.
Despite beating the $184m net profit recorded the year prior, AMP CEO Alexis George said the company faced an operating environment that was “particularly challenging” in 2023.
“AMP’s operating businesses experienced demanding economic conditions, however management held to their clear strategy to focus on the performance of the operating businesses, and maintained a disciplined approach to controlling costs,” Ms George said.
It comes off the back of the latest Jobs and Skills Australia report, national online job ads fell by 2 per cent (or 5200 job ads) in January 2024 to stand at 254,500.
“Despite this, vacancy numbers remain at record levels, with around two-thirds more advertisements in the labour market presently than compared with the monthly average for 2019,” CommSec stated.
The Australian dollar increased by 0.1 per cent to finish at US 64.62c late on Tuesday.
On Wall Street overnight, the S & P 500 closed 1.4 per cent lower, while the Dow Jones fell 1.4 per cent.
The concerning plunge comes as traders wait to see what the Federal Reserve will do about inflation.
The US recorded higher-than-expected inflation, which has dashed hopes of the first interest rate cut in March.
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