Source : THE AGE NEWS
The Australian sharemarket was lower again in early trade on Thursday, continuing its losing streak after the nation’s largest supermarket chain warned of rising inflation pressures because of the war on Iran, sending its stocks lower.
The S&P/ASX was down 24.80 points, or 0.3 per cent, at 8662.20 at 11.15am AEST, even as eight of its 11 industry sectors advanced. Woolworths shares slumped 6 per cent after the grocery giant said full-year profits from its Australian supermarkets would come in at the low to medium end of its forecasts, as the war in the Middle East raised fuel and other supply costs. The warning also weighed on its biggest rival Coles, which lost 3.3 per cent in early trade.
Another spike in oil prices overnight also hurt investor sentiment, putting the local bourse on track for its eighth straight day of losses. The ASX fell 0.3 per cent on Wednesday.
The Australian dollar edged up 0.1 per cent to US71.26¢ after local inflation figures – while not as bad as feared – came in close to a three-year high on Wednesday and bolstered bets for further rate hikes by the Reserve Bank.
Woolworths said food sales at its Australian supermarkets rose 6.5 per cent in March and April so far, and pledged to keep a lid on costs and boost productivity to help mitigate the cost pressures, but Woolworths chief executive Amanda Bardwell warned that “higher fuel costs and secondary effects are likely to have an increasing inflationary impact as we move through the calendar year”.
“The conflict in the Middle East is creating greater uncertainty for our customers, suppliers and team at a time when cost-of-living pressures are already acute,” Bardwell said in a statement to the ASX.
Metcash, which supplies independent supermarket chains such as IGA, fell 2.5 per cent, and dairy company A2 lost 1 per cent.
The materials sector was also lower, with mining giants BHP and Rio Tinto both down 1.6 per cent and Fortescue Metals losing 2 per cent. Gold producers Northern Star (down 3.3 per cent) and Evolution Mining (down 3 per cent) fell as gold held a three-day loss after the Federal Reserve kept US interest rates steady overnight. It said the war was clouding the economic outlook. Bullion was near $US4550 ($6387) an ounce, having lost 3.4 per cent this week.
South32 shares dived 7.2 per cent after the silver miner said costs for its Taylor zinc-lead-silver project in Arizona would blow out to about $US3.3 billion ($4.6 billion), blaming higher costs for steel and concrete, revised shaft construction costs, higher inflation and US tariffs. Production would also start later than previously flagged, it said.
On the flipside, tech stocks were stronger after some encouraging results from US tech giants overnight, with local software makers WiseTech Global and Xero up 2.1 per cent and 2.2 per cent, respectively, and data centre operator NextDC gaining 0.8 per cent. Financial stocks also gained, with all big four banks up between 0.3 per cent and 1 per cent.
Exchange operator ASX Ltd. jumped 4.5 per cent after naming Darren Yip, who oversees its markets and listings divisions, as its interim boss amid a broader strategic review to lift risk management and governance practices.
Energy stocks had another strong morning on the back of the latest jump in oil prices, which surged to a new wartime high overnight as the disruption to Persian Gulf energy supplies persists. The main international oil price, Brent crude, jumped nearly 8 per cent, largely because investors were worried that the impasse in US-Iran talks could last for a while. That could keep Persian Gulf energy products from reaching the rest of the world for weeks or, in a worst-case scenario, months.
Shares in Woodside Energy (up 0.5 per cent) and Santos (up 1.5 per cent) rose, and refiners Ampol and Viva Energy added 1 per cent and 1.3 per cent, respectively. Alternative fossil fuel producers Yancoal (3.7 per cent) and Whitehaven Coal (2.4 per cent) also gained.
On Wall Street overnight, shares seesawed as investors juggled the spiking crude prices and the Federal Reserve’s interest rate announcement, while a quarter of high-profile earnings dropped after the closing bell. The S&P 500 closed flat, the Dow Jones lost 0.6 per cent and the Nasdaq composite edged up.
The Fed left its benchmark interest rate unchanged for the third straight meeting but signalled it could still cut rates in coming months, a move that attracted the most dissents since October 1992. Three officials dissented in favour of removing the reference to a future cut, while a fourth, Stephen Miran, dissented in favour of an immediate rate cut.
Outgoing Fed chair Jerome Powell said he would stay on the Fed’s board after his term as chair ends for an “undetermined period of time”. The Senate Banking Committee earlier approved Powell’s successor as chair, Trump appointee Kevin Warsh, on a party-line vote.
After Wall Street’s closing bell, Alphabet topped Wall Street estimates for quarterly revenue growth at its cloud computing unit, driven by sustained enterprise spending on artificial intelligence infrastructure. Its shares were up about 4 per cent in extended trading.
Alphabet’s total revenue rose 22 per cent to $US109.9 billion in the first quarter, compared with an estimate of $US107.2 billion, according to LSEG data.
Facebook owner Meta Platforms raised its annual capital expenditure forecast, doubling down on its decision to plough billions into artificial intelligence infrastructure even as it seeks cost savings via planned layoffs. Its shares slumped 5 per cent in after-hours trading.
Microsoft shares dropped 2 per cent after posting a third-quarter revenue of $US82.9 billion.
Amazon shares slid 2.3 per cent on its results, with total net sales up 17 per cent to $US181.5 billion.
Earlier, the US stock market remained largely resilient as more companies joined the procession reporting stronger profit growth for the start of 2026 than analysts expected.
With AP, Bloomberg, Reuters
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