ASX 200 futures were up 31 points (+0.36%) at 9:15 am AEDT on Wednesday, pointing to a firmer open after the local market slid sharply in the previous session, even as global risk appetite strengthened overnight.
Australian equities fell 0.53% on Tuesday, with losses broad-based and led by the major banks, as investors rotated out of defensives and financials despite strong momentum across commodities and select resource names.
ASX: Banks drag as commodities diverge
Tuesday’s sell-off was notable for its breadth, with nine of 11 sectors finishing lower. Banks were the biggest drag, with all four majors losing more than 2%, reflecting renewed caution around valuations as interest-rate expectations remain finely balanced ahead of today’s inflation data. Defensive sectors also retreated, suggesting the move was more about positioning than macro stress.
That said, resources again told a different story. Copper surged to fresh all-time highs above US$13,000 a tonne overnight, lifting major miners including BHP Group and Rio Tinto, while copper-exposed mid-caps continued to attract speculative interest. Sandfire Resources touched a record high, while several smaller copper names posted double-digit gains.
The rally was not confined to base metals. Defence-linked stocks moved against the broader market, with heightened geopolitical tensions keeping defence spending firmly in focus. Names including DroneShield and Austal outperformed as investors rotated towards security-themed exposures.
Corporate activity also featured prominently. BlueScope Steel surged more than 20% after receiving a takeover proposal led by SGH, highlighting how M&A remains a powerful catalyst even as broader market sentiment wobbles.
Wall Street: Fresh highs, broader leadership
Overnight, US markets provided a strong lead, with the Dow Jones and S&P 500 closing at new record highs, supported by improving breadth rather than a narrow tech rally. The Russell 2000 outperformed, pointing to renewed interest in cyclicals and smaller companies.
While technology remains influential, leadership broadened beyond megacaps, aided by strength in industrials, materials and select consumer names. Investors appear increasingly comfortable leaning into a pro-cyclical rotation as global growth expectations stabilise.
Markets largely absorbed the latest developments in Venezuela without disruption, with risk assets extending gains even as geopolitical headlines remained elevated.
Commodities surge as momentum builds
Commodities were the standout overnight theme. Copper, nickel, silver and lithium prices all surged, driven by a mix of Chinese demand signals, supply constraints and speculative momentum. Nickel notched its biggest daily gain in more than three years, while silver climbed to record highs.
Gold also pushed higher, reinforcing the view that investors are seeking exposure to real assets as inflation remains sticky and central banks move cautiously towards easing.
Oil prices eased modestly, with markets weighing geopolitical developments against the reality that Venezuelan supply remains structurally constrained, limiting near-term implications for global balances.
The Australian dollar firmed toward 67 US cents, reflecting the stronger commodity backdrop and improved offshore sentiment.
What’s on today
Locally, attention turns to November CPI at 11:30 am AEDT, a key input into the RBA’s early-2026 policy outlook.
Globally, US services PMI and job openings data are due overnight, offering further insight into whether the US economy is cooling at the margin or merely moderating.
After a sharp local pullback and a powerful offshore lead, the ASX looks set to start Wednesday on firmer footing — with commodities, cyclicals and stock-specific catalysts likely to remain the key drivers as January momentum builds.