The Australian sharemarket is expected to open lower today after Wall Street sold off overnight as US bond yields climbed, Walmart disappointed investors and oil prices pushed higher.
ASX futures at 4.55am AEST pointed to a decline of 23 points, or 0.3%, at the open.
Investors will also have another busy day of corporate reporting to digest, with results due from Guzman y Gomez (ASX:GYG), Coast Entertainment, Lifestyle Communities, Charter Hall, Inghams, Latitude and TPG Telecom.
ASX snaps 6-session losing streak
The Australian sharemarket edged higher on Thursday, snapping a 6-session losing streak as it tracked an earlier recovery on Wall Street and pressure from global bond markets eased following US Treasury plans to increase purchases of longer-dated government debt.
The S&P/ASX 200 closed 30 points, or 0.3%, higher at 9,083.80, with five of the 11 industry sectors finishing in positive territory.
Gold miners, healthcare and technology stocks led the gains, while financials came under pressure. The Australian dollar slipped to US71.21 cents.
Investor attention was also on Australian labour market data, which showed the unemployment rate unexpectedly increased to 4.5% in July from 4.4%.
The economy shed 15,800 jobs, driven by a decline in part-time employment, compared with expectations for an increase of 12,000.
The softer labour market data reduced expectations that the Reserve Bank of Australia (RBA) would move quickly to raise interest rates again.
“This is the highest unemployment rate we’ve had in nearly 5 years — making September a very unlikely time for the RBA to deliver a rate hike,” Barrenjoey Markets chief rates strategist Andrew Lilley said.
Gold stocks were among the strongest performers after bullion surged more than 4% on Wednesday before holding above US$4,500 an ounce.
Northern Star Resources jumped 6.2% after reporting a 24% increase in net income to $1.7 billion for the year to June 30, supported by a 26% rise in the average gold price received.
Evolution Mining gained 10.2% and Newmont rose 6.9%.
Fortescue slipped 0.6% after reporting a 15% decline in full-year net profit to US$2.9 billion, or about $4.1 billion, despite resilient iron ore prices.
The miner continues negotiations with China’s state-backed iron ore buyer, China Mineral Resources Group, which has imposed restrictions on shipments of Super Special Fines, one of Fortescue’s key lower-grade products.
BHP gained 3.2% and Rio Tinto added 1.8% as copper remained above US$14,000 a tonne.
Technology stocks also advanced, with Xero up 2.4% and WiseTech Global rebounding 9.1% after falling almost 9% on Wednesday.
Codan (ASX:CDA) surged 12.4% after reporting a 69% increase in profit and lifting its dividend by 70%.
Healthcare stocks were supported by a further 2.8% rise in CSL, while Pro Medicus gained 3.6% and ResMed added 2.8%.
The major banks were weaker, with Commonwealth Bank down 2.7%, NAB losing 1.3%, Westpac falling 1.8% and ANZ declining 1.6%.
Goodman Group (ASX:GMG) slipped 1.5% despite reporting a 15.7% increase in full-year operating profit to $2.67 billion, supported by continued demand for data centres linked to AI, cloud computing, networking and storage.
Super Retail Group was one of the strongest performers, rallying 15.1% after posting a $206 million full-year profit. While profit fell 7.2%, the result was ahead of market expectations and sales increased 3.5% during the first 7 weeks of the new financial year.
Wall Street falls as yields and oil rise
US sharemarkets sold off on Thursday as Treasury yields resumed their climb despite Washington’s expanded bond buyback plans, while disappointing results from Walmart and rising oil prices added to investor concerns.
Walmart shares dropped more than 9% after its quarterly comparable sales missed Wall Street expectations, with higher gasoline prices weighing on consumer spending.
Consumer discretionary stocks were among the biggest drags on the S&P 500, with Amazon falling 2.2% and Tesla losing 1.7%.
Energy stocks moved in the opposite direction as oil prices rose for a 5th consecutive session amid stalled US-Iran peace talks and continuing supply disruptions in the Middle East.
Cryptocurrency-related companies also rallied after the US President called on Congress to pass cryptocurrency legislation.
The Dow Jones Industrial Average finished 1.3% lower, the S&P 500 lost 0.9% and the Nasdaq declined 1%.
US government bond yields moved higher despite the Treasury’s surprise plans to increase purchases of long-dated debt.
The initiative initially eased pressure on global borrowing costs, but concerns over inflation and rising government debt pushed longer-dated Treasury yields higher again.
The US 10-year Treasury yield rose 6 basis points to 4.7%, while the 2-year yield gained 1 basis point to 4.19%.
European markets edge lower
European sharemarkets finished marginally weaker as elevated oil prices kept inflation concerns in focus, although an initial recovery in global bond markets following the US Treasury intervention limited losses.
Energy shares rose 0.9% as Brent crude prices climbed, while the travel and leisure sector fell 0.7% as higher fuel costs weighed on sentiment.
JD Sports Fashion plunged 14.3%, making it the weakest performer on the STOXX 600, after the UK sportswear retailer cut its profit outlook following a steeper-than-expected decline in 2nd-quarter underlying sales, particularly in the US.
The FTSEurofirst 300 index finished 0.1% lower, while the UK’s FTSE 100 ended flat.
Currencies mixed against US dollar
Currency markets were mixed against the US dollar.
- The euro was buying US$1.1677.
- The Japanese yen traded at ¥159.07 to the US dollar.
- The Australian dollar eased to US71.10 cents.
Oil climbs above US$93, gold extends gains
Global oil prices climbed to their highest level in more than 3 weeks after US President Donald Trump warned of retaliation against countries supporting Iran.
Trump threatened “economic warfare and isolation on an unprecedented scale” against Tehran and warned of consequences for countries providing Iran with “any type of lifeline”.
- Brent crude futures settled 2.4% higher at US$93.78 a barrel.
Base metals were mixed.
- Copper futures slipped 0.4% as inventories increased, although weakness in the US dollar provided some support.
- Aluminium was marginally lower at US$3,325 a tonne.
- Gold futures extended their gains as expectations for lower real interest rates offset concerns over inflation, settling 0.6% higher at US$4,571 an ounce.
- Iron ore futures were unchanged at US$95.16 a tonne.