The Australian sharemarket is set to retreat on Friday, with futures pointing to a fall of 14 points, or 0.2%, at the open after weakness in semiconductor and artificial intelligence-linked stocks dragged global markets lower.
Investors will also continue to monitor escalating tensions in the Middle East, alongside fresh economic data from the United States and Europe.
ASX finishes flat as BHP and energy stocks weigh
The S&P/ASX 200 ended Thursday virtually unchanged, slipping less than 1 point to 8,840.70 as losses among major miners and energy companies offset gains in financial stocks.
Seven of the index’s 11 sectors finished in positive territory following a 0.4% rise on Wednesday.
BHP Group Ltd (LSE:BHP, ASX:BHP) fell 2.3% after reporting solid full-year production but a softer June quarter and forecasting lower copper output in the year ahead as ore grades decline at its Chilean operations.
Copper production for the year to June 30 fell 3% to almost 2 million tonnes, while iron ore output increased 1% to a record 264.7 million tonnes.
BHP expects copper production to fall to as low as 1.65 million tonnes in FY2027, reflecting lower grades at assets including the Escondida mine.
Fortescue Ltd (ASX:FMG) declined 1.1% and Rio Tinto Ltd (LSE:RIO, ASX:RIO, OTC:RTNTF) eased 0.4%.
Gold stocks were also weaker as bullion slipped below US$4,000 an ounce. Evolution Mining Ltd (ASX:EVN) dropped 3% and Newmont Corp lost 1%.
Energy companies retreated despite oil remaining elevated amid fresh US strikes on Iran. Woodside Energy Group Ltd (ASX:WDS, LSE:WDS, OTC:WOPEF) fell 1.5%, Santos Ltd (ASX:STO) declined 1.8%, Whitehaven Coal Ltd lost 2.8% and New Hope Corp Ltd shed 1.1%.
Financial stocks provided support, with Commonwealth Bank of Australia (ASX:CBA) gaining 1.8%, National Australia Bank Ltd rising 1.3%, ANZ Group Holdings Ltd adding 0.7% and Westpac Banking Corp edging 0.1% higher.
AMP Ltd surged 9.8% after lifting its earnings outlook. The wealth manager now expects first-half underlying net profit after tax of between A$170 million and A$180 million, supported by stronger earnings from its Chinese partnerships and investment portfolio.
Technology stocks were mixed. WiseTech Global Ltd gained 2.1%, while Xero Ltd and Technology One Ltd each rose 1.2%. NextDC Ltd fell 2.6% as investors took profits following recent gains.
Wall Street slides as chip stocks retreat
US markets closed lower on Thursday as heavy losses among semiconductor companies outweighed generally positive economic data and a strong corporate earnings season.
Memory-chip stocks were among the biggest decliners, with SanDisk, Western Digital, Seagate Technology and Intel falling between 5.8% and 12.6%.
The Philadelphia Semiconductor Index dropped 4.3%, while communication services was the weakest sector in the S&P 500.
Healthcare stocks rose 2.2%, supported by a 1.2% gain for UnitedHealth after the company exceeded earnings expectations and upgraded its 2026 outlook.
United Airlines fell 1.8% as higher oil prices weighed on its guidance, while GE Aerospace declined more than 4% despite lifting its full-year profit forecast.
The Dow Jones Industrial Average fell 0.2%, the S&P 500 lost 0.5% and the Nasdaq Composite dropped 1.5%.
US retail sales rose 0.2% in June, marking the smallest increase in five months but matching expectations. Weekly jobless claims fell by 8,000 to 208,000, the lowest level in two months.
US Treasury yields moved modestly higher, with the 10-year yield gaining 1 basis point to 4.56% and the two-year yield adding 2 basis points to 4.16%.
European markets post modest gains
European sharemarkets edged higher for a third consecutive session as strong corporate earnings helped offset caution surrounding the Middle East conflict.
The continent-wide FTSEurofirst 300 Index rose 0.1%, while the UK’s FTSE 100 gained 0.5%.
Media stocks led the market with a 1.4% rise, while basic resources stocks fell 1.4%. Technology stocks were broadly flat.
ASML Holding NV (NASDAQ:ASML, XETRA:ASME) advanced 3.2%, while STMicroelectronics (NYSE:STM) declined 4.9% and BE Semiconductor Industries fell 3.2% as the region’s chip sector continued to cool following a strong previous quarter.
Australian dollar slips below US70 cents
Major currencies weakened against the US dollar.
- The euro fell 0.2% to US$1.1439.
- The Japanese yen eased 0.1% to ¥162.40.
- The Australian dollar declined 0.2% to US$0.6994, after trading around US$0.6996 late in Thursday’s local session.
Oil and gold retreat as Middle East risks remain
Global oil prices finished lower but remained near their highest levels since mid-June as the conflict with Iran continued to threaten key energy supply routes.
Brent crude futures fell 0.8% to US$84.23 a barrel after Iran reportedly urged Yemen’s Houthi movement to prepare to close the Red Sea oil export route.
Base metals were mixed, with copper futures unchanged and aluminium rising 0.9% amid ongoing supply concerns.
Gold futures fell 1.5% to US$3,992 an ounce as escalating geopolitical tensions reinforced expectations that US interest rates could remain higher for longer.
Iron ore futures slipped 0.1% to US$98.81 a tonne as traders weighed ample supply against the risk of strike action at Port Hedland.
What to watch
US housing starts and industrial production figures are due later on Friday.
In Europe, investors will focus on the release of June consumer price inflation data