The S&P/ASX 200 closed 43 points lower, down -0.58% yesterday. It was the second consecutive fall for the index, but this may reverse despite Wall Street’s dip last night.
Consensus, however, is for a flat day on the markets.
Tech and materials led yesterday’s dip, while iron ore miners traded lower in the back half of the session. BHP Group Ltd (LSE:BHP, ASX:BHP) was down 1.2%, Fortescue Metals Group (ASX:FMG) Ltd fell 1.3% and Rio Tinto dropped 1.7%.
Iron ore futures on the Singapore exchange retreated further, down 2.6% on September contracts.
ASX 200 futures were up 0.1%, or 8 points, to 7251 after the US session ended, hinting at the flat start.
Meanwhile, outgoing Reserve Bank of Australia governor Philip Lowe will deliver his last Statement on Monetary Policy at 11.30am today.
The economic outlook is likely to remain unchanged, with inflation to reach 3.25% by the end of next year and will “be back within the 2-3% target range in late 2025”.
This week the RBA left the cash rate steady at 4.10%, citing consistent data that will help the central bank achieve its mandate.
Australia should expect a period of “below-trend growth and this is expected to continue for a while”.
The labour market remains “very tight”, with projected sub-par growth to see unemployment climb from 3.5% to about 4.5% late next year.
Dr Lowe forecasts the economy to grow about 1.75% through 2024, which is consistent with forecasts.
What happened overnight?
Here’s what we saw (source Commsec)
US markets
Dropped on Wednesday after strong US jobs data and as the US Treasury said it will ramp up its debt issuance just a day after the US was downgraded by Fitch Ratings.
Ratesensitive megacap stocks, including Tesla (-2.7%), Nvidia (-4.8%), Meta Platforms (-2.6%) and Apple (-1.6%) all tumbled as the yield on the US 10-year Treasury yield rose to its highest in nearly nine months. Shares of Advanced Micro Devices shed 7%, despite better-than-expected results.
The Dow Jones index fell by 348 points or 1%. The S&P 500 index slid 1.4%, notching its worst day since April. And the Nasdaq index shed 310 points or 2.2%, posting its worst day since February.
European markets
Fell on Wednesday as global risk sentiment was pulled down by a US credit rating downgrade. Mining stocks fell by the most, down by 2.7%. Among single stocks, Telefonica Deutschland plunged 17.9% to its lowest since March 2020, with traders linking the move to rival Vodafone announcing a roaming deal with 1&1 in Germany.
The continent-wide FTSEurofirst 300 index fell by 1.3%. And in London, the UK FTSE 100 index slid 1.4%.
Currencies
Were weaker against the US dollar in European and US trade.
- The Euro fell from US$1.0994 to US$1.0917 and was near US$1.0935 at the US close.
- The Aussie dollar slipped from 65.92 US cents to 65.27 US cents and was near 65.40 US cents at the US close.
- The Japanese yen dipped from 142.24 yen per US dollar to JPY143.45 and was near JPY143.40 at the US close.
Commodities
Global oil prices slid 2% on Wednesday despite a historic drop in US crude stocks, as traders de-risk following the downgrade of the US government's top credit by a major ratings agency. US crude stocks fell last week by 17 million barrels (survey: -1.4 million), the largest drop in US crude inventories according to records dating back to 1982.
- The Brent crude price fell by US$1.71 or 2% to US$83.20 a barrel.
- The US Nymex crude price shed US$1.88 or 2.3% to US$79.49 a barrel.
Base metal prices fell on Wednesday as a stronger US dollar as well as weak factory data and a struggling property sector in top consumer China soured sentiment.
- The copper futures price slid 1.7% and the aluminium futures price fell by 2.2%.
- The gold futures price fell by US$3.80 or 0.2% to US$1,975 an ounce.
- Spot gold was trading near US$1,935 an ounce at the US close.
- Iron ore futures shed US91 cents or 0.8% to US$107.41 a tonne.
On the small cap front
The small cap market fell 0.71% yesterday to 2,849.60.
Making news this morning, which you can read more about throughout the day here at Proactive are:
- Alkane Resources Ltd (ASX:ALK) released further results from its drilling program at the Northern Molong Porphyry Project in Central New South Wales. The program extends over three kilometres from Kaiser to Boda, down to Boda Two and Boda Three. Alkane believes this system has the potential to be a large, tier one gold-copper project.
- Clinical stage drug discovery company AdAlta Ltd (ASX:1AD) successfully dosed the first participants in the company’s Phase 1 extension study of AD-214 - its lead fibrosis asset.
- Azure Minerals Ltd (ASX:AZS, OTC:AZRMF)’s drilling at the Andover Lithium Project (Azure 60% / Creasy Group 40%), in the West Pilbara region of Western Australia, has intersected the thickest zones of lithium mineralisation to date – reflecting some of the best lithium drill intersections globally.
- Galena Mining Ltd (ASX:G1A) achieved its first positive monthly cash flows from the Abra Base Metals Mine as it continues to ramp-up to steady state production.
- Alto Metals Ltd (ASX:AME) reported further gold results from RC drilling at the Indomitable Camp, within its 100%-owned Sandstone Gold Project in Western Australia.