‘Red light blinking' over China that ASX investors can't ignore
The long-held theory goes that the extraordinary run-up in Commonwealth Bank shares will come to an end when investors start to shift out of bank stocks and into more attractively priced miners. Since CBA shares peaked on June 24, the stock is down about 4.7 per cent. Over the same period, BHP shares have risen 13 per cent and Rio Tinto is up 11 per cent.
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Sydney Morning Herald
5 hours ago
- Sydney Morning Herald
Aussie dollar hits eight-month high as shares slide; Macquarie down, Fortescue jumps
The heavyweight miners were mixed, with BHP down 0.6 per cent, South32 down 0.6 per cent, but Rio Tinto up 0.3 per cent. Santos slipped 1.4 per cent and Boss Energy fell 6.4 per cent, one of the day's worst performers. The lifters Healthcare was the only sector in the green, up 1 per cent, with CSL 1.5 per cent stronger. Clarity Pharmaceuticals surged 10.2 per cent, Neuren Pharmaceuticals 9 per cent and Mesoblast 8 per cent, three of the strongest performers. Three of the big four banks finished higher. NAB added 1.2 per cent, Westpac gained 0.5 per cent, Commonwealth Bank – the biggest stock on the index – rose 0.1 per cent. ANZ fell 0.4 per cent. Mining giant Fortescue, chaired by billionaire Andrew Forrest, jumped 4.3 per cent after it revealed on Thursday it had shipped a record volume of the steel-making material iron ore from its mines in Western Australia in the year to June 30. Despite an economic downturn cooling demand from steel mills in China, by far the biggest buyer of Australian iron ore, Perth-based Fortescue said it had shipped 55.2 million tonnes of iron ore in the three months through June, taking its full-year volume to an all-time high of 198.4 million tonnes. Pexa Group soared 16.5 per cent to a nearly three-year high of $15.09 after the digital property exchange announced leading UK bank NatWest had agreed to facilitate future remortgages on Pexa's platform. The lowdown The local sharemarket lost ground after slightly hawkish comments by Reserve Bank governor Michele Bullock, while the local currency climbed to an eight-month high. Bullock reiterated the bank's gradual monetary tightening in recent years was aimed at getting inflation under control without causing unemployment to rise excessively. Tightness in the labour market was a key concern of Australia's central bank as standing in the way of more rate cuts, but conditions were easing in line with expectations, Bullock said in a speech to the Anika Foundation. A 'measured and gradual' approach to policy easing was appropriate, Bullock said, adding that labour demand remained strong while core inflation was easing gradually. Loading NAB head of market economics Tapas Strickland said the speech leaned slightly hawkish and showed that an August rate cut was not a done deal. A second-quarter inflation readout that will be released on July 30 would be important, he said. Bullock's remarks led three-year government bond yields to extend gains, adding about 3 basis points to trade at 3.48 per cent. That's a 7-basis-point increase on the day. The Australian dollar also extended gains to be 0.3 per cent higher Risk currencies, including the Australian dollar, had benefited from a risk-on tone overnight as trade tensions eased, said NAB economist Pat Bustamante. Loading Financial markets are betting the Reserve will cut two more times this year while paring back the probability of a third reduction to 40 per cent, down from 76 per cent on Wednesday. Markets were paying close attention to various tariff negotiations, and global equities continued their rally as bulls drew fresh conviction from signs the US may strike more trade deals soon after clinching a pact with Japan. Overnight, US stocks set more records. Shares jumped in Tokyo, where the Nikkei 225 rallied 3.5 per cent after Trump announced a trade framework that would place a 15 per cent tax on imports coming from Japan. That's lower than the 25 per cent rate that Trump had earlier said would kick in on August 1. 'It's a sign of the times that markets would cheer 15 per cent tariffs,' said Brian Jacobsen, chief economist at Annex Wealth Management. 'A year ago, that level of tariffs would be shocking. Today, we breathe a sigh of relief.' Locally, the federal government on Thursday revealed it would lift biosecurity restrictions on US beef as it seeks a way to dampen the blow of Trump's volatile tariff regime. Cattle producers were left blindsided by the decision, even though the level of US product arriving in Australia is expected to be very low. It has been suggested Australia will use the easing of rules to argue its case for the US to wind back 50 per cent tariffs on steel and aluminium and Trump's threat to impose a 200 per cent tariff on pharmaceuticals. Agriculture Minister Julie Collins said the decision was a purely scientific one. Trump in April singled out the beef trade disparity with Australia after Australian beef exports to the US surged last year, reaching $4 billion amid a slump in US beef production.
Perth Now
9 hours ago
- Perth Now
RBA governor's speech sinks ASX 200
Australia's sharemarket slid during Thursday's trading as disappointing quarterly updates and a speech by Reserve Bank governor Michele Bullock weighed on the market. The benchmark ASX 200 closed lower on Thursday dropping 27.80 points or 0.32 per cent to 8,709.40 points while the broader All Ordinaries slipped 22 points or 02.4 per cent to 8,979.40. The Aussie dollar jumped 0.19 per cent and is now buying 66.11 US cents. All sectors except health care closed in the red, with the falls led by industrials, property, consumer discretionary and energy stocks. ASX slipped after RBA governor Michele Bullock's speech. Photo: NewsWire/ Gaye Gerard Credit: News Corp Australia Market heavyweight CSL gained 1.53 per cent to $269.56, while ResMed gained 0.44 per cent to $41.10 and Cochlear closed 0.03 per cent higher to $314.01. Three of the four major banks also finished in the green, despite the sector as a whole falling. CBA eked out a 0.10 per cent gain to $173.47, NAB jumped 1.24 per cent to $37.66 and Westpac finished 0.54 per cent higher to $33.29. ANZ was the outlier sliding 0.43 per cent to $30.44. After jumping on the opening bell, shares subsequently fell after RBA governor Michele Bullock made her speech at the Annika Foundation lunch. IG market analyst Tony Sycamore said the market's confidence in a rate cut in August slipped after the speech. 'The RBA governor has elected to look through the recent criticism and, in her speech, downplayed the rise in employment saying it wasn't a surprise,' he wrote in a market note. 'She also noted that monthly inflation data suggests the inflation rate may not fall as fast as forecast in May.' Ten of the 11 sectors finished in the red. NewsWire Christian Gilles Credit: News Corp Australia Following Ms Bullock's speech the markets knocked off about five basis points or RBA rate cuts by the end of the year. In company news earnings results disappointed on Thursday. Macquarie shares dived 5.08 per cent to $213.84 after telling the market longstanding chief financial officer Alex Harvey will retire mid-2026 as well as announcing its first quarter data. Macquarie, which is broken up into four business segments, said its banking and financial services and Macquarie capital improved performance over the three months until June 30. But its Macquarie Asset Management and Commodities and Global Markets segments slipped. Overall Macquarie Group reported a $3.7bn profit for FY25. It was also a disappointing trading update for Bapcor with shares slumping to a five-year low after the Autobarn and Midas owner said statutory net profits after tax would lie between $31 to $34m. Shares in the company slumped 28.38 per cent to $3.66 on the announcement. In a positive trading update Fortescue shares jumped 4.34 per cent to $19 after the investing giant announced its fourth quarter update showing it shipped a record-breaking annual shipment of 198.4Mt in FY 2025. Lynas Rare Earths gained 5.03 per cent to $10.65 after its shipment jumped 38 per cent compared to the prior quarter.
News.com.au
10 hours ago
- News.com.au
‘Downplayed unemployment shock': Market drops on RBA governors speech
Australia's sharemarket slid during Thursday's trading as disappointing quarterly updates and a speech by Reserve Bank governor Michele Bullock weighed on the market. The benchmark ASX 200 closed lower on Thursday dropping 27.80 points or 0.32 per cent to 8,709.40 points while the broader All Ordinaries slipped 22 points or 02.4 per cent to 8,979.40. The Aussie dollar jumped 0.19 per cent and is now buying 66.11 US cents. All sectors except health care closed in the red, with the falls led by industrials, property, consumer discretionary and energy stocks. Market heavyweight CSL gained 1.53 per cent to $269.56, while ResMed gained 0.44 per cent to $41.10 and Cochlear closed 0.03 per cent higher to $314.01. Three of the four major banks also finished in the green, despite the sector as a whole falling. CBA eked out a 0.10 per cent gain to $173.47, NAB jumped 1.24 per cent to $37.66 and Westpac finished 0.54 per cent higher to $33.29. ANZ was the outlier sliding 0.43 per cent to $30.44. After jumping on the opening bell, shares subsequently fell after RBA governor Michele Bullock made her speech at the Annika Foundation lunch. IG market analyst Tony Sycamore said the market's confidence in a rate cut in August slipped after the speech. 'The RBA governor has elected to look through the recent criticism and, in her speech, downplayed the rise in employment saying it wasn't a surprise,' he wrote in a market note. 'She also noted that monthly inflation data suggests the inflation rate may not fall as fast as forecast in May.' Following Ms Bullock's speech the markets knocked off about five basis points or RBA rate cuts by the end of the year. In company news earnings results disappointed on Thursday. Macquarie shares dived 5.08 per cent to $213.84 after telling the market longstanding chief financial officer Alex Harvey will retire mid-2026 as well as announcing its first quarter data. Macquarie, which is broken up into four business segments, said its banking and financial services and Macquarie capital improved performance over the three months until June 30. But its Macquarie Asset Management and Commodities and Global Markets segments slipped. Overall Macquarie Group reported a $3.7bn profit for FY25. It was also a disappointing trading update for Bapcor with shares slumping to a five-year low after the Autobarn and Midas owner said statutory net profits after tax would lie between $31 to $34m. Shares in the company slumped 28.38 per cent to $3.66 on the announcement. In a positive trading update Fortescue shares jumped 4.34 per cent to $19 after the investing giant announced its fourth quarter update showing it shipped a record-breaking annual shipment of 198.4Mt in FY 2025. Lynas Rare Earths gained 5.03 per cent to $10.65 after its shipment jumped 38 per cent compared to the prior quarter.
