The Australian sharemarket looks set to claw back ground this morning after a bruising session yesterday, when the ASX 200 posted its sharpest one-day fall since April. Futures were up 43 points, or 0.5%, at 9:30 am AEST, signalling a modest rebound as Wall Street found support in heavyweight tech stocks and a dip in bond yields overnight.
Investors also continued to pile into gold, pushing the precious metal to fresh record highs above US$3,550 an ounce, while oil prices slumped as OPEC+ flagged a possible production hike.
Wall Street and global markets
US equities bounced back after two days of weakness, with the S&P 500 climbing 0.5% and the Nasdaq gaining just over 1%. Alphabet surged 9% and Apple added nearly 4% after a federal judge delivered a softer-than-feared antitrust ruling that let both companies keep key revenue streams intact.
The rebound was helped along by softer job openings data, which fuelled bets that the Federal Reserve will cut rates this month.
In Europe, stocks also edged higher after Tuesday’s bond-driven sell-off, with Germany’s DAX up 0.5% and London’s FTSE rising 0.7%.
ASX recap
The local market was awash in red on Wednesday, with the benchmark tumbling 161.8 points, or 1.8%, to close at 8,738.8. It was the steepest sell-off in almost five months, with all 11 sectors finishing lower.
Technology stocks were hit hardest, sliding nearly 4% after Wall Street’s tech rout spilled into local names. Financials were not far behind, dropping 2.8% as rising bond yields weighed heavily on the big banks. Commonwealth Bank and Westpac shed more than 3% each, while NAB, ANZ and Macquarie all lost around 2%.
Miners also came under pressure, with BHP down 1.3%, while CSL extended its recent slide with another 0.8% decline. The across-the-board weakness pushed the index below 8,800 for the first time in weeks.
Commodities and currencies
Precious metals remain the bright spot for investors, with gold extending its surge to US$3,560 an ounce and silver pushing past US$41 for the first time in more than a decade. The rally reflects both expectations for rate cuts and continued demand for safe-haven assets.
Oil, however, told a different story, sliding more than 2.5% on speculation that OPEC+ could lift production targets when members meet this weekend. Iron ore managed a small gain, up to US$103 a tonne, while copper slipped nearly 1% on concerns about global growth. The Australian dollar hovered near US65.4 cents, while Bitcoin was trading just above US$112,000.
ASX today
After such a sharp decline yesterday, a rebound at the open appears likely, but whether the move can be sustained will depend on confidence returning to sectors like banks and property.
The local calendar brings July trade balance figures at 11:30 am AEST, while in the US, the ISM services PMI is due late tonight. A raft of companies also trade ex-dividend today, including Coles, Eagers Automotive, Meridian and Viva Energy.
Gold’s momentum shows no signs of slowing, though yesterday’s fade in ASX gold miners raises questions about whether equities can keep pace with bullion. Energy stocks will be tested after oil’s overnight slide, while investors will also be watching whether today’s rebound broadens beyond tech to include financials and real estate.