ASX Recoups Losses
· news
ASX Recoups Losses to Finish Flat as Gold Miners, Tech Stocks Gain
The Australian sharemarket has been known for its volatility, but Tuesday’s session was particularly eventful. Despite initial losses of up to 0.7%, the market managed to recover and close essentially unchanged. The S&P/ASX 200 inched up just 2 points, or 0.02%, to 8793.30.
Tech stocks led the gains after their peers on Wall Street stabilized following last week’s sell-down. NextDC announced new customer contracts that boosted its contracted utilization by 11% in the June quarter, sending its shares soaring by 7.7%. Other tech stocks like Xero and Technology One also benefited from renewed investor confidence.
Gold miners were another notable performer. Gold prices jumped 1.2% to around $US4057 an ounce, driven by dip-buying as traders monitored developments around Iran for clues on the oil price impact on inflation. Northern Star Resources rose 3.3%, while Evolution Mining jumped 5.6%. South32, which owns the largest silver mine in the country, rallied 6.6% after beating its own production forecasts.
Iron ore and copper heavyweights were mixed, with BHP up 1.3%, Rio Tinto flat, and Fortescue Metals down 1.3%. Iron ore prices fell for a second day due to deteriorating profit margins at Chinese steel mills and ongoing US-Iran hostilities clouding the demand outlook.
Energy stocks generally advanced despite oil prices easing. The US and Iran exchanged strikes for a 10th consecutive day, but Brent crude was down 1% at $US88.35 a barrel mid-afternoon after surging almost 6% over the past two sessions. Oil and gas giant Woodside rose 1.1%, while refiners Ampol and Viva Energy were up 0.5% and 1.2%, respectively.
However, financial stocks – which make up more than a third of the ASX – weighed on the index. CBA finished 0.4% lower, National Australia Bank dropped 1%, and Westpac and ANZ Bank both fell 1.2%. Discretionary retailers and healthcare stocks struggled as well, with Officeworks and Bunnings owner Wesfarmers losing 1.2% and Eagers Automotive falling 3.8%.
The US sharemarket was also volatile overnight, with worries about higher energy costs boosting inflation weighing on bond prices and stocks. The S&P 500 dipped 0.2%, the Dow Jones Industrial Average dropped 0.6%, and the Nasdaq composite finished essentially flat.
This week brings a crucial test for Big Tech as companies like Tesla, Google parent Alphabet, Microsoft, Meta, Apple, and Amazon report their quarterly earnings. “Markets will want to see strong results and more signs of robust demand,” said Tom Essaye at The Sevens Report.
The question on everyone’s mind is whether the Australian market will follow suit, or continue to defy global trends. One thing is certain: the next few weeks will be crucial in determining the direction of the ASX.
Reader Views
- CSCorrespondent S. Tan · field correspondent
The ASX's ability to recoup losses is a testament to its resilience, but let's not get too ahead of ourselves - this recovery is largely driven by a handful of high-profile stocks rather than broad-based growth. NextDC's 7.7% surge, for instance, was welcome news for tech investors, but what about the smaller players still struggling to gain traction? Meanwhile, gold miners continue to ride the inflation wave, with Northern Star Resources and Evolution Mining leading the charge - but can this trend sustain itself in a global market increasingly wary of safe-haven assets?
- CMColumnist M. Reid · opinion columnist
The ASX's resilience in the face of turmoil is always impressive, but Tuesday's session was more than just a rebound from losses – it was a reflection of investors' lingering uncertainty. While tech stocks and gold miners shone bright, financials remained a drag on the market, underscoring concerns about credit quality and regulatory risks that are unlikely to dissipate anytime soon. The real question is whether this stability will persist in the face of rising global tensions and an increasingly unstable macroeconomic landscape.
- RJReporter J. Avery · staff reporter
The ASX's ability to shrug off losses and close flat is a testament to its resilience in the face of global uncertainty. However, beneath the surface, some sectors are showing cracks - notably financial stocks, which dragged on the overall market despite their relatively modest decline. As interest rates remain low and economic growth stalls, investors would do well to keep a close eye on this segment. With over a third of the ASX comprised of financials, any weakness here could have far-reaching consequences for the broader market.