Australian shares are expected to open marginally lower on Tuesday, even after a rebound in US technology stocks helped Wall Street finish higher overnight.
Futures at 6am AEST point to an 11-point, or 0.12%, fall for the local market at the opening bell, while the Australian dollar was stronger at US69.57 cents.
The softer lead comes after a subdued start to the week for the ASX, with investors largely sitting on the sidelines following the end of the financial year and ahead of the next major catalyst.
ASX starts week in the red
The Australian sharemarket drifted lower on Monday as trading volumes fell sharply in a quiet session.
The S&P/ASX200 slipped 13.4 points, or 0.15%, to 8,831, while the broader All Ordinaries lost 11.3 points, or 0.12%, to 9,037.
With little local or global macroeconomic data due this week and reporting season still ahead, activity was well below normal levels.
“Volumes are terrible. Traders are tapping the screen, saying, ‘Is this thing on?’” Moomoo market strategist Michael McCarthy said.
“We got through the data last week, there’s no reporting going on at the moment, but it’ll start up soon and there’s very little data this week, and with things quietening down on the geopolitical front, there really isn’t too much to serve the markets.”
Banks, miners and major supermarkets weighed on the index, while energy, healthcare, consumer discretionary and technology stocks provided some support.
Gold stocks gave back early gains as the precious metal eased during the local session, although Vault Minerals was the standout among the top 200 after receiving a $5.6 billion takeover bid from Genesis Minerals (ASX:GMD).
Among the major miners, BHP fell 0.8% to $60.02, Rio Tinto was flat and Fortescue gained 0.9% to $18.52, despite facing a class action over alleged workplace misconduct, including claims of sexual harassment and sex discrimination.
Rare earths, battery minerals and copper stocks were broadly weaker as metals prices eased against a recovering US dollar.
Energy stocks advanced as oil prices crept higher during the session, despite OPEC+ agreeing to lift output in August. Woodside and Santos each gained more than 0.8%, while Viva Energy rose almost 0.5% to $2.15 after launching a sustainable aviation fuel storage and blending facility at its Pinkenba Terminal, which will supply jet fuel directly to Brisbane Airport.
The heavyweight financials sector lost more than 0.3%, with Westpac leading three of the big four banks lower, while NAB edged higher.
Technology and healthcare stocks outperformed the broader market, with investors finding apparent value after months of weakness. Woolworths weighed on consumer staples, which fell 0.6%, despite gains from A2 Milk and Elders.
In consumer discretionary stocks, rallies in Wef and Light & Wonder helped offset weaker sessions for JB Hi-Fi, Eagers Automotive and Premier Investments.
Wall Street rises as chip stocks rebound
US sharemarkets climbed overnight as investors returned to chip and artificial intelligence-linked stocks ahead of the second-quarter earnings season.
The Philadelphia SE Semiconductor Index rose 2.2%, recovering from two straight sessions of losses.
Broadcom gained 3.7% after the chipmaker and Apple agreed to extend a deal through 2031 to develop and supply custom chips. AMD climbed 6.6%, while Western Digital advanced 7.1%.
Tesla rose more than 6%, helping lead six of the seven megacap technology stocks higher. Microsoft was the exception, falling 1% after announcing plans to cut about 2.1% of its workforce, or around 4,800 jobs.
SpaceX dipped 1%. Elon Musk’s rocket and AI company is set to join the tech-heavy Nasdaq 100 on Tuesday, US time.
Elsewhere, O’Reilly Automotive tumbled 6.7% after sending a cash offer to buy Genuine Parts, which fell 3.2%.
The Dow Jones finished 0.3% higher, the S&P 500 gained 0.7% and the Nasdaq climbed 1.1%.
US government bond yields eased as traders assessed the Federal Reserve’s rate path following last week’s weaker-than-expected jobs report. The US 10-year Treasury yield fell 1 point to 4.47%, while the US 2-year yield dipped 2 points to 4.11%.
European markets pull back from record highs
European sharemarkets retreated after hitting a record high on Monday, as investors took profits following a strong run.
Utilities and healthcare were the biggest drags, with both sectors down 1.8%.
Germany’s DAX bucked the broader weakness, rising 0.15% to a record high and marking a fifth straight session of gains. Industrial orders in Germany rose more than expected in May, supporting sentiment in Europe’s largest economy.
Among major movers, easyJet jumped 9.3% after the British budget airline agreed in principle to a sweetened takeover offer from US investment firm Castlelake, valuing the carrier at up to £5.5 billion.
Defence stocks were among the stronger performers, gaining 1.33%, as the war in Ukraine showed no signs of easing.
The continent-wide FTSEurofirst 300 index ended 0.4% lower, while the UK FTSE 100 lost 0.3%.
Currencies mixed against US dollar
Currency markets were mixed against the US dollar.
- The euro added 0.1% to US$1.144.
- The Japanese yen fell 0.4% to JPY162.08.
- The Australian dollar rose 0.3% to US69.54 cents.
Oil eases, metals and gold advance
Global oil prices slipped on Monday, trading around pre-Iran war levels after Saudi Arabia cut its official selling prices, OPEC+ approved another production target increase from August and exports through the Strait of Hormuz continued to recover.
- Brent crude futures settled 0.2% lower at US$71.99 a barrel.
Base metals moved higher as investors refocused on supply disruptions linked to the Middle East conflict.
- Copper futures rose 1%, while aluminium futures jumped 1.8%.
- Gold futures advanced as investors pared back expectations for a US interest rate hike. Futures settled 1% higher at US$4,168 an ounce.
- Iron ore futures also recovered, supported by a drawdown in Chinese port stockpiles and a fresh liquidity injection from China’s central bank, although weaker steel mill profitability capped gains. Futures settled 0.1% higher at US$98.30 a tonne.
Looking ahead, US ADP weekly employment figures and the May trade balance are due later today.