Wall St slumped overnight, pointing to a down day on the ASX today ahead of the Easter long weekend.
ASX 200 futures are down 0.3% to 7760 points after US trading ended.
The ASX200 closed marginally lower yesterday, down 2 points at 7758, as resilience in Financials (+0.97%), Consumer Staples (+0.77%) and Utilities (+0.46%) offset declines in Energy (-2.65%), Information Technology (-1.31%) and Health Care (-1.07%).
Local equities navigated competing forces, with stronger-than-expected Chinese gross domestic product (GDP) data — 5.4% versus the expected 5.2% — countered by a sharp decline in US futures following Nvidia’s after-market announcement.
Among ASX tech stocks, NEXTDC fell 3.1%, Wisetech Global dropped 1.21%, and Xero shed 1.2%. Bucking the trend, Zip surged 16.22% to A$1.72 after reporting a 219% year-on-year increase in EBITDA to A$46 million and lifting full-year guidance.
“Uncertainty around US trade policy saw gold hit a fresh record high of $3298 on safe-haven demand. Regis Resources soared 6.46% to $4.8, Gold Road Resources rose 3.53% to $3.23, and Northern Star Resources finished 1.47% higher at $22.09,” IG Markets analyst Tony Sycamore said.
“Today, in the lead up to the Easter Long weekend, all eyes will be on the Australian jobs report for March. The market is looking for the Australian economy to add 40,000 jobs and for the unemployment rate to tick up to 4.2%. If the job report is weaker than expected, it will fuel expectations of an RBA rate cut in May, which is currently fully priced. The rates market is pricing in a cumulative 115bp of RBA rate cuts by year-end.”
Wall Street tumbles as Nvidia faces export blow
US equity markets slumped overnight, led by a sharp sell-off in technology stocks, after fresh export curbs on artificial intelligence (AI) chips and hawkish remarks from United States Federal Reserve Chair Jerome Powell spooked investors.
Nvidia Corporation announced a US$5.5 billion charge related to US government restrictions on exports of its H20 AI chips to China. The stock plunged 6.9% to US$104.49, erasing US$175 billion in market capitalisation. Advanced Micro Devices (AMD) also dropped 7.3% to US$88.29 amid concerns that it too would be affected by the new measures.
Addressing the Economic Club of Chicago, Powell warned that increased tariffs could stoke inflation while dragging on growth. Although acknowledging slower US economic activity, he reiterated the Fed’s preference for more data before deciding on future interest rate changes. Powell also dismissed the likelihood of Fed intervention to stabilise markets, citing “orderly” conditions.
Despite the hawkish tone, interest rate markets are pricing in a cumulative 92 basis points of cuts by year-end, with the first 25 basis point cut expected in June.
European markets retreat on earnings misses
European sharemarkets closed lower on Wednesday, pressured by weaker-than-expected corporate earnings. Semiconductor equipment maker ASML Holdings fell as much as 8% after reporting an earnings miss and cautioning on ongoing uncertainty linked to United States trade tariffs.
Despite the broader weakness, energy stocks outperformed, buoyed by a 2% rebound in global oil prices.
- The pan-European FTSEurofirst 300 index edged down 0.2%.
- In contrast, the United Kingdom’s FTSE 100 index rose for a fifth consecutive session, gaining 0.3%.
Currency markets and gold rally as investors seek safety
Currencies strengthened against the US dollar, which hovered near two-year lows. Investors turned to traditional safe havens, favouring gold, the Swiss franc, and the Japanese yen.
- The euro appreciated from US$1.1350 to US$1.1413 and was trading near US$1.1400 at the US close.
- The Australian dollar firmed to US63.92 cents before easing to US63.72 cents.
- The Japanese yen, after initially weakening to JPY142.90, recovered to JPY141.80.
Oil climbs on Chinese data and geopolitical risks
Global oil prices rose following improved economic data from China and renewed geopolitical tensions. Iranian officials reiterated their uranium enrichment plans were non-negotiable, raising the prospect of stricter sanctions.
- Brent crude rose US$1.18, or 1.8%, to US$65.85 per barrel.
- US Nymex crude gained US$1.14, or 1.9%, to US$62.47.
Metals advance on China stimulus optimism
Base metal prices advanced, supported by data showing China's economy grew 5.4% in the last quarter, surpassing forecasts.
- Copper futures rose 1.3%, while aluminium eased 0.3%.
- Gold futures surged more than 3% to US$3,346.00 per ounce, with spot gold near US$3,355.
- Iron ore also benefited, rising 1.1% to US$100.08 per tonne.