Headline indices of the Australian financial market declined for the first time in five straight sessions on Friday, 11 January 2019, as investors opted to lock in profits after the market's recent run of gains. Market losses were however, limited following overnight gains on Wall Street and better than expected domestic retail sales data of November 2018. ASX sectors were mixed, with shares of energy, materials, industrials, and financial sectors being notable losers, while consumer discretionary, consumer staples, communication services, and energy issues were notable gainers. Around late afternoon trade, the benchmark S&P/ASX200 index fell 7.78 points, or 0.13%, to 5,787.50 points, while the broader All Ordinaries index dropped 6.93 points, or 0.12%, to 5,847 points.

Data released by the Australian Bureau of Statistics Friday morning showed that seasonally adjusted retail sales in the country was up 0.4% in November from a month earlier, beating a market pundits expectation of 0.3% gain.

The US market gained on Thursday, bolstered as signs of progress between the world's two biggest economies and dovish commentary from the Fed help lift sentiment. Fed Chairman Jerome Powell reiterated on Thursday the U.S. central bank has the ability to be patient on monetary policy given that inflation remains stable. Fed Vice Chair Richard Clarida also struck a dovish tone, further cementing the central bank's willingness to remain patient on the issue of raising rates. Minutes from the Federal Reserve's Dec. 18-19 meeting showed several policymakers were in favor of keeping rates steady this year. On Thursday, Fed officials echoed the minutes' cautious stance. St. Louis Fed President James Bullard, a voter on the Federal Open Market Committee this year, said the U.S. central bank's policy stance may be too hawkish and it should listen to market signals and stop raising interest rates. Charles Evans, president of the Federal Reserve Bank of Chicago, another FOMC voter in 2019, repeated his view on Thursday that the Fed has “good capacity to wait” before delivering what he expects will be three more rate hikes. Markets are now pricing in no further rate hikes by the Fed this year.

On the trade front, China and the United States made progress on “structural issues” such as forced technology transfers and intellectual property rights in talks this week and more consultations are being arranged, China's commerce ministry said on Thursday. The three-day talks in Beijing that wrapped up on Wednesday were the first face-to-face negotiations since US President Donald Trump and his Chinese counterpart, Xi Jinping, met.

Shares of retail sectors were among the most improved sectors in%age terms. Retails sales for the month of November rose 0.4% compared to estimates of 0.3%. Around A$27.1b was spent over the month with the biggest improvements in household goods spending (+1.2) and Apparel (+1.5%). Major retail stocks were improving following the release with JB Hi-Fi (JBH) rising 2.9%, Myer (MYR) 0.7% higher.

Treasury Wine Estates (TWE) climbed 4.5% after reiterating full year guidance of 25% earnings (EBITS) growth for fiscal 2019 and 1H19 EBITS between A$335m to A$340m. TWE fell sharply by 4.8% yesterday after US alcoholic beverage company Constellation Brands, which distributes Corona in the US, expected weaker sales.

Energy names also continued its recent ascendency with global oil prices steadily rising for the past seven sessions. Origin Energy (ORG) was 1.1% higher while Caltex (CTX) rose 1.4%.

Financials were also higher despite a mixed session so far for the four major banks. National Bank (NAB) led the gains by advancing 0.6% while Westpac (WBC) was slightly weaker by 0.25%.

Materials were the main drag on the market with miners generally weaker. BHP Group (BHP) was down 0.9% while diversified miner, South32 (S32) was also weaker by 0.6%. Fortescue Metals (FMG) was bucking the trend, lifting 0.5%.

ECONOMIC NEWS: Australia construction sector continued to contract in December, with a Performance of Construction Index score of 42.6, the latest survey from the Australian Industry Group showed on Friday. That's down from 44.5 in November, and it moves farther beneath the boom-or-bust line of 50 that separates expansion from contraction. Among the individual components of the survey, activity, employment, new orders, supplier deliveries and selling prices all contracted. Input prices and average wages both weakened but remained firmly in expansion territory.

CURRENCY: Australian Dollar was tad higher against greenback and against a basket of other peers on Friday, following the better than expected retail sales release for November. The Australian dollar was quoted at 71.95 US cents, from 71.84 US cents on Thursday.