ASX closes lower as miners, tech lead losses
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More news: The Australian sharemarket finished lower as the mining and tech sectors led losses.
The benchmark ASX 200 index fell 0.62% to 8,911.1, with eight of the 11 sectoral indices in the red.
The tech sector (-1.4%) was the worst performing as WiseTech Global (-3.4%) and Xero (-4%) fell. The materials sector (-1.3%) also fell as BHP (-0.8%), Rio Tinto (-2%) and Fortescue (-1.7%) dropped. Gold miners like Ora Banda Mining (-7.5%) and Pantoro Gold (-6.6%) were among the worst performing on the ASX 200.
IFM Investors’ voting power in toll road operator Atlas Arteria (0%) has reached 38.83% as its takeover bid battle continues. Meanwhile, Challenger (+1%) announced plans to merge its multi-affiliate management business Fidante with Channel Capital.
Washington H. Soul Pattinson (+0.8%) announced it will sell Brickworks Industrial JV Trust real estate interests to Goodman Australia Industrial Partnership (GAIP) and Goodman Group entities for $1.89 billion.
Competition watchdog ACCC has greenlit an $11.7 billion takeover of Qube (+0.6%) by a consortium led by Macquarie Asset Management.
TPG Telecom-owned (+0.8%) mobile network operator Vodafone experienced a major outage this morning due to a power disruption at a major network hub. Service was restored before midday.
ASX opens up 0.1% as markets assess inflationary pressures
More news: Australian shares opened slightly higher as markets reassessed inflationary pressures following the Reserve Bank of Australia and Federal Reserve interest rate pause this week.
The benchmark ASX 200 was up by 10.9 points, or 0.12%, to 8,977 at 10:39am AEST. Ten of the 11 sectoral indices opened in the green.
Consumer discretionary (+0.6%) was the strongest performing sector at the open, supported by a lift in Wesfarmers (+0.6%), Light & Wonder (+3.1%), Breville (+1.3%) and Lovisa (+3%).
Mesoblast (+5.8%), Neuren Pharmaceuticals (+4.4%), Deep Yellow (+3.8%) and 4D Medical (+3.5%) were among the top performing stocks across the ASX 200 at the open.
Elsewhere, mining (-0.7%) was the weakest performing sector, weighed down by Rio Tinto (-0.5%), Northern Star (-2.3%), Evolution Mining (-3.2%) and Lynas Rare Earths (-1.5%).
Bellevue Gold (-3.9%), West African Resources (-3.9%), Ora Banda Mining (-3.7%) and Westgold Resources (-3.5%) were also among the worst performers at the open.
Australian shares to open lower as inflation concerns weigh on Wall Street
The news: The Australian sharemarket is set to open lower after Wall Street closed down overnight, as the Federal Reserve signalled the possibility of higher interest rates while assessing the inflationary impact of the US-Iran conflict. New chair Kevin Warsh highlighted the need to contain inflation, while other policymakers projected the potential for further rate increases later this year.
The numbers: Updated at 7:50am AEST:
- ASX futures: down 61 points to 8,892 points
- Wall Street: Dow Jones down 0.98%, S&P 500 down 1.21%, Nasdaq down 1.34%
- Europe: FTSE 100 up 0.14%, CAC 40 up 0.20%, DAX up 0.10%
- Spot gold: down 1.75% to USD4,256 per ounce
- Oil prices: Brent down 0.10% to USD79.03/barrel, US WTI down 0.08% to USD75.96/bbl
- AUD: down 0.77% at 70.13 US cents
- Bitcoin: down 2.59% to USD63,945.
The context: The three major US indices closed lower on Wednesday, with the S&P 500 and Nasdaq both falling more than 1% after Federal Reserve officials signalled a greater probability of higher interest rates, pushing stocks lower and bond yields higher.
The Federal Reserve left interest rates unchanged at 3.50%-3.75%, as expected, but policymakers projected at lease one rate increase later this year amid concerns inflation will remain above the central bank’s 2% target.
Following the decision and repeated comments from chair Kevin Warsh that “price stability” would remain the Fed’s priority, money markets fully priced in a rate hike by October, according to Bloomberg.
The Fed’s updated projections show nine policymakers expect at least one rate hike, including six who forecast at least two. Another nine expect rates to remain unchanged or to be cut. Warsh did not submit an individual forecast.
On the data front, US retail sales rose 0.9% in May, exceeding economists’ expectations of a 0.5% increase, according to Reuters. The gain was driven by stronger motor vehicle purchases despite higher petrol prices.
Elsewhere, Brent crude traded around USD79 ($113) a barrel, near its lowest level since the early stages of the US-Iran war. The International Energy Agency said even if a peace agreement holds, it could take months for oil production and exports to fully recover.
Globally, the Bank of England is scheduled to announce its latest monetary policy decision at 9:00pm AEST.
