Australian shares are set to open higher on Friday after a strong lead from Wall Street, where the Dow Jones Industrial Average surged to a fresh record close. Gains in healthcare and financial stocks offset weakness in technology shares, while easing Middle East tensions improved broader market sentiment.
ASX 200 futures were up 48 points, or 0.6%, to 8,739, pointing to a positive start for local equities after Thursday's sharp sell-off.
The expected rebound follows strength in US markets overnight, although investors remain focused on commodity price weakness and ongoing geopolitical developments.
ASX tumbles as miners weigh on market
The S&P/ASX 200 fell 99.6 points, or 1.1%, on Thursday to close at 8,686.1, with seven of the 11 sectors finishing lower.
Mining stocks led the decline after iron ore dropped to a two-month low amid growing concerns about rising supply from Guinea's Simandou project. The operation, partly owned by Rio Tinto, shipped 2.2 million tonnes of iron ore in May, just six months after its first exports to China.
The increased supply pressure pushed Singapore iron ore futures down 1.6% to US$102.05 per tonne.
Fortescue fell 4.1% to $21.02, while BHP lost 3.3% to $62.80 and Rio Tinto retreated 3.3% to $188.08. Gold miners also came under pressure, with Northern Star Resources sliding 6.1% to $20.39.
Defensive sectors including utilities, healthcare and consumer staples outperformed as investors sought shelter from commodity-linked weakness.
Dow hits record as healthcare and financials rally
US markets delivered a mixed performance overnight, with the Dow Jones reaching a record closing high.
The Dow gained 1.7%, while the S&P 500 rose 0.4%. The Nasdaq slipped 0.1% as weakness in semiconductor stocks weighed on technology shares.
Healthcare and financials led gains across the S&P 500. UnitedHealth jumped 5.2% following a broker upgrade, while Blackstone surged 8.4% after indicating redemptions from its private credit funds had slowed.
Broadcom was the standout loser, plunging 12.6% despite reporting strong quarterly results. Investors were disappointed by guidance that failed to meet elevated expectations surrounding artificial intelligence-related growth.
The decline weighed on the broader chip sector, with Advanced Micro Devices, Micron Technology and Qualcomm falling between 3% and 8.6%. Marvell Technology bucked the trend, gaining 5%.
Europe advances despite lingering geopolitical concerns
European markets finished higher as oil prices eased and investors welcomed signs of reduced tensions in the Middle East following reports of a potential ceasefire arrangement between Israel and Lebanon.
The pan-European FTSEurofirst 300 rose 0.5%, while the UK's FTSE 100 gained 0.3%.
Software and IT stocks extended their recovery from recent AI-related volatility. Capgemini, Nemetschek, Dassault Systèmes, SAP and Sopra Steria climbed between 6.4% and 8.8%.
Chipmakers weakened following Broadcom's earnings update, with Infineon Technologies and STMicroelectronics falling 3.4% and 2.6%, respectively.
Financial stocks with exposure to China also came under pressure after reports mainland residents faced tighter restrictions on opening offshore accounts in Hong Kong. HSBC, Standard Chartered and Prudential all declined.
Currencies mixed
Major currencies traded in a narrow range against the US dollar.
- Euro: US$1.1609, up 0.1%
- Japanese yen: ¥160.03, little changed
- Australian dollar: US71.31 cents, up 0.1%
Commodities
Oil prices fell as hopes for progress in Iran-related negotiations reduced immediate supply concerns.
- Brent crude: down 2.6% to US$95.23 a barrel
- Base metals delivered a mixed performance.
- Copper futures: up 0.5%
- Aluminium futures: down 0.7%
Gold strengthened as a softer US dollar supported demand for the precious metal.
- Gold futures: up 1.2% to US$4,503 an ounce
Iron ore remained under pressure as concerns persisted over weakening Chinese demand and increasing global supply.
- Iron ore futures: down 1.7%
Looking ahead
Investors will focus on key US labour market data due later on Friday, including May non-farm payrolls and the unemployment rate, which could provide further clues on the outlook for interest rates and economic growth.