The Australian sharemarket is expected to open lower on Monday, with ASX futures indicating a decline of around 0.4% as investors turn their attention to upcoming earnings from Nvidia, the world’s largest listed company by market capitalisation.
The result, due Wednesday US time (Thursday AEST), is being closely watched for clues on whether the artificial intelligence-driven market rally still has momentum after weeks of record-setting gains in global equities.
Investor sentiment weakened on Friday after Wall Street traders took profits in semiconductor and technology stocks amid growing concerns that major US hyperscalers such as Alphabet and Amazon may have overspent on artificial intelligence infrastructure and data centre expansion.
The week ahead also includes key Chinese economic data releases, including retail sales, industrial production and house prices, which could influence commodity markets and broader investor sentiment.
ASX 200 slips as miners lead weekly decline
The S&P/ASX 200 closed Friday down 9.9 points, or 0.1%, at 8,630.8, ending a week dominated by federal budget reactions and profit-taking across the resources sector.
The benchmark index fell 1.3% over the week, with weakness in mining stocks offsetting gains in technology and financials.
Materials stocks came under pressure after copper prices retreated from record highs amid signs elevated prices were dampening Chinese demand. Gold prices also weakened as investors reassessed the outlook for US interest rates following inflation data that pointed to renewed price pressures.
BHP fell 2.6% to $60.46 after three consecutive record closes, while Rio Tinto declined 3.2% to $185.75, ending a four-session streak of all-time highs.
Gold producer Evolution Mining dropped 5.5% to $12.50, lithium developer Liontown Resources lost 6% to $2.35, and Mineral Resources slid 7.7% to $64.77 after managing director Chris Ellison sold 1.75 million shares worth about $122.5 million in his first on-market sale in nine years.
Technology stocks outperformed, with Xero rebounding 8.1% to $79.67 after a sharp decline in the previous session. WiseTech Global gained 3.7% to $38.01, while Megaport added 2.4% to $12.88, extending a strong rally earlier in the week.
Financials also recovered, led by Commonwealth Bank, which rose 1.9% to $159.40 following heavy selling on Thursday linked to concerns around earnings and potential negative gearing reforms. ANZ added 1.1%, while Westpac and National Australia Bank each rose 0.3%.
US markets retreat as tech and semiconductor stocks sell off
US markets pulled back from recent record highs on Friday as rising oil prices and higher bond yields reignited inflation concerns.
The Dow Jones Industrial Average fell 1.1%, while the S&P 500 lost 1.2% and the Nasdaq declined 1.5%.
Semiconductor stocks led the decline, with the Philadelphia Semiconductor Index falling 4%. Nvidia dropped 4.4%, AMD lost 5.7% and Intel fell 6.2% as investors locked in gains from the AI-fuelled rally.
Among individual movers, Microsoft rose 3.1% after billionaire investor Bill Ackman’s Pershing Square disclosed a new position in the company.
Medical device maker Dexcom surged 6.6% after announcing governance changes and the appointment of two independent directors in collaboration with activist investor Elliott Investment Management.
Ford Motor Co fell 7.5%, reversing part of a recent rally tied to optimism surrounding its energy storage business.
Energy was the only positive sector in the S&P 500, rising 2.3% as oil prices surged.
European markets fall on inflation and energy concerns
European equities also finished sharply lower on Friday as escalating tensions involving Iran and the Strait of Hormuz fuelled concerns over energy-driven inflation.
The pan-European FTSEurofirst 300 index dropped 1.6%, while the UK’s FTSE 100 fell 1.7%.
Technology and semiconductor stocks retreated after recent gains, with ASML falling 4.4% and Aixtron down 6%.
Banks were also weaker, with BNP Paribas falling 3% and Deutsche Bank down 2.6%.
Luxury goods giant LVMH slipped 1.1% after agreeing to sell fashion label Marc Jacobs, while Stellantis fell 4.2% following a €1 billion agreement with China’s Dongfeng to manufacture Peugeot and Jeep vehicles.
Currencies edge lower against stronger US dollar
Major currencies weakened slightly against the US dollar in early trade.
- The euro was buying US$1.1623.
- The Japanese yen traded at 158.68 per US dollar.
- The Australian dollar was trading at US71.46 cents.
Commodities mixed as oil surges and metals retreat
Oil prices jumped sharply on Friday as hopes faded for a diplomatic resolution to tensions involving Iran and shipping disruptions in the Strait of Hormuz.
- Brent crude settled 3.3% higher at US$109.26 per barrel.
Base metals weakened as a stronger US dollar triggered profit-taking across the sector.
- Copper futures fell 5.1% to a one-week low, while aluminium lost 2.7%.
- Gold futures declined 2.6% to US$4,562 an ounce as rising inflation concerns strengthened expectations for higher interest rates.
- Iron ore futures slipped 0.3% to US$110.77 per ton.
Looking ahead
In Australia, investors will be watching earnings results from ALS, New Hope and Elders, while Macquarie Group and Alcoa trade ex-dividend.
In China, markets will focus on industrial production, retail sales and unemployment data.
In the United States, Nvidia’s earnings later this week are expected to be the key market event globally.