Australia’s sharemarket is edging closer to a fresh record, but investors are bracing for a potentially volatile start to the week as earnings season hits its busiest stretch. ASX futures are pointing to a 0.6% rise at the open on Monday, or about 51 points, extending last week’s rally that left the S&P/ASX 200 within 10 points of its all-time high.
The benchmark climbed 2.4% last week — its strongest weekly gain in nine months — and is now less than 200 points from the 9115.2 peak set in late October.
However, it did close lower on Friday, retreating sharply as mounting concerns over AI-driven disruption to software business models sparked broad-based selling.
The S&P/ASX 200 fell 125.90 points, or 1.4%, to 8917.60, with 9 of 11 sectors finishing lower.
Technology stocks remained under heavy pressure amid what some analysts have labelled a “SaaSpocalypse”, as investors reassess how artificial intelligence could compress margins across the software sector.
The ASX tech index has now shed 23% over the past month. WiseTech Global dropped 10.4% to $42.62, Xero fell 4.5% to $73.49 and TechnologyOne declined 7.1% to $20.17.
Morningstar market strategist Lochlan Halloway said AI threatens core drivers of the SaaS model, including seat numbers, pricing and product modules.
“Some software companies, particularly those selling commoditised tools with shallow integrations, face a genuine existential threat,” he said. “If one person can now do the work of two, seat counts fall. And if the price of ‘work’ collapses, so too could the value of a software vendor’s product.”
Gold miners were weaker despite a partial recovery in bullion prices. Northern Star fell 3.5% to $28.37, Newmont lost 1.9% to $169.12 and Genesis Minerals dropped 4.6% to $6.87.
Banks also saw profit-taking after recent strength. Commonwealth Bank slipped 1.4% to $176.20, National Australia Bank eased 1.1% to $46.01 and Westpac declined 1.2% to $40.52, despite reporting a better-than-expected $1.9 billion profit as its net interest margin narrowed.
ANZ outperformed, rising 1.3% to $40.89 following a Morgan Stanley upgrade, while AMP surged 9% to $1.39 in its strongest rebound in more than 20 years.
Looking ahead, around 25 ASX-listed companies are due to report earnings this week, including a2 Milk, Ansell, Bendigo & Adelaide Bank, BlueScope Steel, GPT Group, JB Hi-Fi, New Hope, Stockland and Treasury Wine Estates.
US markets mixed as tech weakness offsets softer inflation
US sharemarkets closed mixed on Friday, with cooling inflation data supporting broader indices but AI-related jitters continuing to weigh on technology heavyweights.
The Dow Jones rose 49 points, or 0.1%, the S&P 500 added 3 points, or 0.1%, while the Nasdaq fell 50.5 points, or 0.2%.
For the week, the S&P 500 declined 1.4%, the Nasdaq dropped 2.1% and the Dow fell 1.2%, marking their biggest weekly losses since November.
The S&P 500 information technology and communications services sectors fell between 0.5% and 0.8%, pressured by megacap names including Nvidia and Apple, both down 2.2%.
Applied Materials was a standout, jumping 8.1% after forecasting second-quarter revenue and profit above Wall Street expectations.
Defensive sectors attracted flows, with utilities rising 2.7% and real estate gaining 1.5%, as investors positioned cautiously ahead of the US Presidents Day holiday.
Europe steady as tech strength offsets banking weakness
European markets ended in mixed territory, reflecting investor caution around AI-driven disruption themes.
Tech stocks rose 1.7% to lead sector gains, while banking stocks slid 2.8%.
The pan-European FTSEurofirst 300 edged down 0.1% on Friday but posted a marginal weekly gain of 0.04%. In London, the FTSE 100 rose 0.4% on the day and finished 0.7% higher for the week.
Currencies firm against US dollar
Major currencies strengthened against the US dollar in European and US trade.
- The euro lifted from US$1.1846 to US$1.1881 and was near US$1.1865 at the US close.
- The Australian dollar rose from US$0.7046 to US$0.7085, trading near US$0.7075 at the US close.
- The Japanese yen strengthened from JPY153.65 per US dollar to JPY152.61 and was near JPY152.70 at the US close.
Commodities mixed as gold rebounds and oil steadies
- Gold prices rebounded strongly after the prior session’s sell-off, with futures rising US$97.90, or 2%, to US$5,046.30 per ounce. Spot gold was trading near US$5,042 at the US close. Bullion gained 1.3% for the week as weaker-than-expected US inflation data renewed hopes for Federal Reserve rate cuts.
- Oil prices edged higher as softer inflation data offset concerns that OPEC+ may resume production increases. Brent crude rose US$0.23, or 0.3%, to US$67.75 per barrel, while US Nymex crude gained US$0.05, or 0.1%, to US$62.89. For the week, Brent fell 0.4% and Nymex declined 1%.
- Base metals were mixed. Copper futures rose 0.4% on Friday but fell 1.2% for the week on profit-taking. Aluminium slipped 0.4% on Friday following reports the US may ease some import tariffs, though it gained 0.4% over the week.
- Iron ore futures fell US$0.71, or 0.7%, to US$99.66 per tonne, pressured by rising Chinese stockpiles and stronger-than-expected output from Brazil’s Vale. The contract slipped 0.4% over the week ahead of China’s Lunar New Year holiday.