Local tech stalwarts WiseTech (down 2 per cent), Xero (down 1.5 per cent) and NextDC (down 1.2 per cent) retreated after Dutch semiconductor maker ASML Holding cut its outlook for 2025, triggering a global sell-down in tech stocks. American AI giant Nvidia lost 4.5 per cent during US trading, signalling a slowdown for some of the biggest bellwethers of the industry.
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Meanwhile, energy stocks Santos and Origin lost 2.1 per cent and 1.5 per cent respectively, following Exxon Mobil and other global energy giants lower after oil prices tumbled more than 4 per cent on Tuesday. A barrel of Brent crude, the international standard, has fallen back below $US75 from more than $US80 last week.
Defying the oil market jitters, local energy major Woodside’s shares jumped 0.6 per cent higher after saying its production volumes had jumped to a record in the latest quarter. The company also said it will delist its shares from the London Stock Exchange to reduce admin costs.
Iron ore miners BHP and Rio Tinto both finished 1.1 per cent lower, and Fortescue Metals closed flat. Coal miners also declined, with Yancoal and Whitehaven down 2.9 per cent and 3.2 per cent respectively.
The lowdown
Dragging on the Australian sharemarket, which hit a fresh record high on Tuesday, is softening crude prices as China’s flagging economic growth raises concerns about demand for oil.
Iron ore prices fell overnight fell as investors’ attention shifted from China’s plans for stimulus and the outlook for demand to prospects for supplies ahead of this week’s production reports, which apart from Rio’s report include updates yet to come from BHP and Brazil’s Vale.
AMP chief economist Shane Oliver said Australia’s economy has been relatively resilient compared to its past correlation to China.
“A stimulus-driven cyclical rebound in Chinese growth may not provide as big a boost to the Australian economy and the federal government’s budget as it might have in the past. But it will still help support export demand, commodity prices and resources shares,” Oliver wrote in a note.
“For investors, the move by China towards more aggressive policy stimulus should help the global economy avoid recession and, along with central banks lowering interest rates, is positive for shares on a six- to 12-month horizon. It may not be enough to reverse the Australian share market’s relative underperformance, but it may help reduce it,” he said.
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China’s stimulus is good news for the Australian dollar, Oliver continued, but the big upside is the improving interest rate gap between AUD and USD as the Reserve Bank of Australia falls behind the US Federal Reserve in cutting interest rates.
Meanwhile, worries have eased about Israel possibly attacking Iranian oil facilities as part of its retaliation against Iran’s missile attack early this month, helping prices rebound towards the $US75 mark again on Wednesday. Iran is a major producer of crude, and a strike could upend its exports to China and elsewhere.
On Tuesday, the S&P 500 fell 0.8 per cent, a day after setting an all-time high for the 46th time this year. The Dow Jones dropped 324 points, or 0.8 per cent, and the Nasdaq composite sank 1 per cent.
Nvidia was the heaviest weight on the S&P 500 with its 4.5 per cent slump. It’s a cooldown for the chip company, whose stock is still up 166.2 per cent for the year so far on euphoria about the profits created by the boom around artificial intelligence technology.
Boeing rose 2.3 per cent after the troubled plane maker signalled it could raise up to $US25 billion ($37.3 billion) in new stock or debt to shore up its balance sheet after years of heavy losses. The company said in back-to-back regulatory filings that it could raise the cash over the next three years and enter into a new borrowing agreement with lenders.
Helping to keep the S&P 500 and Dow close to their records were gains for several financial companies following better-than-expected profit reports for the summer.
In the bond market, trading of Treasuries resumed after a holiday on Monday, and yields sank following a weaker-than-expected report on manufacturing in New York state. The yield on the 10-year Treasury fell to 4.03 per cent from 4.10 per cent late on Friday.
Tweet of the day
Quote of the day
“We understand the completion of the review by Intersection may be a challenging time for some of our team members and have made arrangements for our Employee Assistance Program, Converge, to be on site at multiple locations for the next five business days for any confidential discussions or support you may require.”
That’s Nine Entertainment’s interim CEO Matt Stanton, ahead of the release of an external independent review into culture issues at the media company.
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A NSW Supreme Court judgment has struck out claims that the trustee of the multibillion-dollar Pratt Family Holdings Trust acted fraudulently or dishonestly in excluding the late Richard Pratt’s love child, Paula Hitchcock, from the family fortune.
Hitchcock launched legal proceedings in the NSW Supreme Court in 2022 seeking inclusion in the trust that would entitle her to a share of assets valued in the tens of billions of dollars.
The judgment by Justice Michael Meek on Wednesday gives Hitchcock leave to amend her statement of claim for a sixth time, but also struck out allegations of fraud or dishonesty by the trustee in excluding her from the trust in 2001 when she was a child.
With AP and Bloomberg
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