Source : THE AGE NEWS
By Staff reporters
The Australian sharemarket was slightly lower at lunchtime, weighed down by losses from big names such as Macquarie Group and Aristocrat, despite a strong session on Wall Street where investors took heart from a surprise dip in inflation in the world’s largest economy.
The S&P/ASX 200 was down 8.60 points, or 0.1 per cent, at 8260.40 at 12.56pm AEST, with six of the 11 industry sectors declining. Tech and energy stocks were going strong, but their gains were countered by falls in consumer discretionary stocks and utilities.
The ASX is taking a breather.Credit: Louie Douvis
News that Australia’s wage growth was stronger than expected in the first three months of the year wasn’t enough to lift the consumer sector. The Wage Price Index advanced an annual 3.4 per cent in the first quarter, exceeding economists’ estimates, Australian Bureau of Statistics data showed.
The Australian dollar edged up 0.1 per cent to US64.80 ¢.
Pokies maker Aristocrat crashed 13 per cent after reporting first-half results that missed market expectations. Operating revenue rose 8.7 per cent to $3 billion and operating earnings went up 12.8 per cent to $1.25 billion, which was less than analysts had been forecasting.
Investment banking and financial services Macquarie Bank lost 2.2 per cent after finding itself in the crosshairs of the Australian Securities and Investments Commission (ASIC). Targeting the Millionaires’ Factory for the second time in a week, the corporate watchdog is taking Macquarie to court for failing to report as many as 1.5 billion short sales over 15 years.
The big four banks were mixed, with Commonwealth Bank – the biggest stock on the bourse – up 0.5 per cent after posting a rise in quarterly profits to $2.6 billion. NAB rose 0.7 per cent, ANZ was flat and Westpac fell 0.8 per cent.
The iron ore heavyweights were unsteadier after their strong gains on Tuesday, when they were buoyed by hopes for easing global trade tensions. BHP, the world’s largest miner, fell 0.7 per cent even after its CEO, Mike Henry, told a global mining conference overnight that the mining titan is well-positioned to navigate its way through the uncertainty created by Trump’s trade wars. Rio Tinto slipped 0.1 per cent, while Fortescue (up 1 per cent) was in the green.
On the flipside, energy stocks extended their winning streak, with oil and gas giants Woodside (up 3.5 per cent) and Santos (up 0.4 per cent) both higher after oil prices jumped again overnight, spurred by US-China trade detente and US President Donald Trump’s increasingly hostile rhetoric on Iranian supply.
Tech stocks yet again followed their US peers higher, with WiseTech Global and Xero up 1.5 per cent and 1 per cent, respectively, while family member tracking app Life360 continued to soar, up a further 9.9 per cent after its massive sales growth reported on Tuesday.
Overnight, Wall Street rose following an encouraging report that showed inflation unexpectedly slowed in the world’s largest economy last month. The S&P 500 climbed 0.7 per cent and erased its loss for the year so far. The Dow Jones fell 0.6 per cent, and the Nasdaq composite rose 1.6 per cent as AI and other tech stocks led the way.
Stocks have been roaring back since the S&P 500 fell nearly 20 per cent below its record last month on hopes that Trump will ease his stiff tariffs on trading partners worldwide before they create a recession and send inflation surging higher. The S&P 500, which sits at the centre of many retirement accounts, is back within 4 per cent of its all-time high set in February and has erased its losses for the year so far.
Tuesday’s report said that even with all the uncertainty around trade, and even with many businesses rushing to import products from other countries before tariffs raise their prices, inflation slowed to 2.3 per cent last month from 2.4 per cent in March.
It’s encouraging because such data pulls the economy further from a worst-case scenario called “stagflation”, one where the economy stagnates but inflation remains high. The Federal Reserve has no good tools to fix the toxic combination. It could try to lower rates to help the economy, for example, but that would likely lead to worse inflation in the short term.
Wall Street’s benchmark index jumped again overnight.Credit: Bloomberg
Even with Tuesday’s encouraging report, though, economists and analysts say inflation may still run higher in coming months because of Trump’s tariffs. That is likely to leave the Fed waiting for more data to guide their decision on whether and when to cut interest rates in order to help the economy.
“I think investors are aware that the trade deal is not done yet,” said Louis Wong, director for Phillip Securities Group in Hong Kong.
“I would advise investors to remain cautious in the near term and to be prepared for unexpected news from the trade front,” he added.
On Wall Street, stocks in the artificial intelligence industry were also strong as it was announced Nvidia and Advanced Micro Devices will supply semiconductors to Saudi Arabian artificial intelligence company Humain for a massive data centre project, acting under a Trump administration initiative that lifts restrictions on delivering advanced technology to the region. Nvidia rose 5.6 per cent and was the biggest single force lifting the S&P 500. AMD shares jumped by 4 per cent.
Nvidia chief executive officer Jensen Huang announced the partnership on stage at the Saudi-US Investment Forum in Riyadh, the Gulf nation’s capital. The announcement came alongside US President Trump’s visit to the country.
Super Micro Computer, which builds servers used in AI, jumped 16 per cent, and GE Vernova, which is hoping to power vast AI data centres, rose 4 per cent. Palantir Technologies gained 8.1 per cent.
