Australian Shares End Eight-Day Rally Amid Mixed Sector Performance and Investor Caution

Australian shares snapped an eight-day winning streak on Thursday, marking a cautious end to a remarkable rally that had pushed the market to its highest levels since August. The S&P/ASX200 index declined slightly, closing at 7,997.7, just shy of the psychologically significant 8,000-point mark it had briefly surpassed earlier in the week.

Over the past eight trading sessions, investor sentiment had been buoyed by a series of positive economic reports and easing international market conditions, matching the best streak seen this year. However, Thursday's session saw a mix of gains and losses across various sectors, indicating a more measured investor approach.

While six out of the eleven sectors on the local bourse closed higher on Tuesday, the real estate sector took a notable hit, declining by 1.6%. This fall was exacerbated by a nearly 9% drop in shares of office tower giant Dexus, which reported a massive net loss of AUD 1.6 billion for the fiscal year 2023/24, primarily due to unrealized devaluations in its investment property portfolio.

The financial sector presented a mixed bag. The Australia and New Zealand Banking Group (ANZ) rose 0.6%, following favorable third-quarter results, which included a smaller-than-expected bad debt provision of AUD 45 million. Meanwhile, Westpac and NAB experienced marginal declines, while Commonwealth Bank of Australia saw a slight increase.

On the mining front, major players such as BHP, Rio Tinto, and Fortescue Metals Group rebounded, reversing recent declines in iron ore prices. BHP and Rio Tinto posted gains of 1.3% and 0.6%, respectively, while Fortescue Metals climbed 1.5%.

The market's eight-day rally had been underpinned by optimism surrounding the domestic economic outlook and signals of potential easing measures from major global central banks. The Australian dollar also saw strength, climbing above USD 0.67 for the first time since mid-July, as traders prepared for potentially dovish moves from the Federal Reserve.

Overall, while the conclusion of the win streak might suggest cautious profit-taking, the robust performance of key sectors reflects underlying investor confidence in Australia's economic resilience amidst global uncertainties.