The S&P/ASX 200 futures were 43 points higher (+0.48%) at 8:30 am AEST, pointing to a positive start. This follows a weaker Thursday session where the benchmark index fell 25 points or 0.29%, giving back the previous day’s gains. Trading remains confined to a narrow range, with the index caught between its 20-day and 50-day moving averages.
Healthcare stocks were again the main drag, with the sector index at its lowest since November 2023. CSL dropped to a fresh multi-year low, while other notable decliners included Neuren (-7.4%), Telix (-4.4%) and ResMed (-2.7%). CSL is now trading at levels last seen in May 2019, down almost 9% since its FY25 results.
By contrast, real estate (+0.68%) and energy (+0.65%) provided support. Lower bond yields lifted property stocks, while oil’s three-day rebound helped energy counters. Still, overall breadth was mixed, with 57% of constituents finishing lower. Investors remain cautious ahead of the US consumer price index release.
Wall Street climbs to record highs
Wall Street closed at record highs on Thursday, powered by gains in Tesla and Micron Technology. Tesla climbed 6.0%, while Micron surged 7.6% after Citigroup lifted its price target. Warner Bros Discovery jumped 29.0% on reports of a potential Paramount Skydance cash bid.
Economic data showed consumer prices rising faster than expected in August, marking the largest annual increase in seven months. At the same time, initial jobless claims hit a near four-year high. This combination reinforced expectations that the Federal Reserve will cut rates this month.
The Dow Jones Industrial Average rose 617 points (1.4%), the S&P 500 gained 0.9% and the Nasdaq added 157 points (0.7%).
European equities boosted by defence sector
European equities finished higher, supported by defence stocks. BAE Systems (+6.3%), Rheinmetall (+2.3%) and Rolls-Royce (+2.1%) advanced after heightened geopolitical concerns in Eastern Europe, following Poland’s downing of a suspected Russian drone.
The European Central Bank kept interest rates unchanged as expected but provided little guidance on future moves, stressing that decisions remain data-dependent. The pan-European FTSEurofirst 300 index rose 0.6%, while London’s FTSE 100 gained 0.8%.
Currencies edge higher against the US dollar
Major currencies firmed against the US dollar. The euro advanced from US$1.1663 to US$1.1735, while the Australian dollar rose from US65.99 cents to US66.60 cents. The Japanese yen strengthened to JPY147.20 per US dollar.
Commodities mixed on supply and demand concerns
Oil prices fell for a third session, with Brent crude down 1.7% to US$66.37 a barrel and US Nymex crude 2.0% lower at US$62.37. Concerns about weakening US demand and oversupply outweighed geopolitical risks in the Middle East and Ukraine.
Base metals strengthened, with copper futures up 0.9% and aluminium climbing 2.8%, supported by a weaker US dollar. Gold eased 0.2% to US$3,673.60 an ounce but remains near record highs, while spot prices hovered around US$3,633. Iron ore futures dipped 0.6% to US$105.18 a tonne, pressured by rising Chinese steel inventories.
Looking ahead
Locally, Reserve Bank assistant governor Brad Jones is due to speak, and several stocks including CAR Group, Cleanaway Waste, G8 Education and WiseTech Global will trade ex-dividend. In the United States, investors await the University of Michigan consumer sentiment index for further signals on economic momentum.