Source : THE AGE NEWS
Australia’s sharemarket has snapped a four-session losing streak, but investor sentiment remains subdued, with the Reserve Bank’s battle with inflation far from over.
The S&P/ASX200 rose 21.4 points on Wednesday, up 0.24 per cent, to 8808.4, as the broader All Ordinaries improved by 24.3 points, or 0.27 per cent, to 9012.6.
Nine of 11 local sectors ended the day higher as energy stocks and miners fell behind and mixed May inflation figures left the door open to further interest rate hikes in 2026.
The headline consumer price index (CPI) for May came in cooler than expected at 4 per cent year-on-year, while the RBA’s preferred trimmed mean measure rose to 3.6 per cent from 3.4 per cent in April.
Materials clocked a fifth straight session of losses as an increasingly hawkish outlook for US borrowing costs continued to bolster the greenback, weighing on metals prices and the global growth outlook.
“The biggest thing that is psychologically important to the market here is the Fed (US Federal Reserve), and whether it can kick and build and become a saturated consensus trade into this long US dollar position,” Pepperstone head of research Chris Weston said.
“And that has an impact on materials stocks, and obviously the commodities that they’re selling.”
The energy sector fell more than 1 per cent as oil prices slumped to their lowest level since the beginning of the Persian Gulf conflict, weighing on Santos, Woodside and refinery operators Viva Energy and Ampol.
Coal miners were broadly weaker while uranium stocks bounced after days of selling.
The financials sector staged a modest 0.3 per cent improvement, as NAB led three of the big four banks into the green, while ANZ lost ground.
IT stocks outperformed the bourse, soaring more than 5 per cent in a broad-based rally led by rebounds in segment giants WiseTech Global and Xero.
Health care stocks were also strong, surging more than 2 per cent with big moves from Telix Pharmaceuticals, CSL and Pro Medicus.
In company news, Westpac appointed Macquarie’s Richard Heeley as chief information officer, to replace the retiring Scott Collary.
Baby Bunting shares tumbled by more than 10 per cent after it cut its 2026 profit guidance by roughly 12 per cent.
The Australian dollar was buying US69.06¢ on Wednesday afternoon, down from US69.53¢ on Tuesday after dipping to 11-week lows against the greenback shortly after May inflation figures were released.
“While domestic events and the Aussie’s disappearing yield advantage are clearly playing a role in the AUD/USD decline, so too is the resurgent USD, which looks like a volcano primed to erupt,” IG market analyst Tony Sycamore said.
“The next few domestic data prints – starting with tomorrow’s jobs report – will be crucial in deciding whether the Aussie can find any near-term footing or whether the AUD/USD extends its decline.”
Overnight, Wall Street’s benchmark S&P index fell 1.4 per cent. It is coming off 11 weekly gains out of the last 12, led largely by technology stocks. The Dow Jones, which is less influenced by tech stocks, gave up an early gain and closed just 0.1 per cent lower. The Nasdaq composite fell 2.2 per cent.
The selling largely targeted companies that have seen their values surge amid the frenzy over artificial intelligence technology. Their pricey stock values give them more influence over the broader market’s direction. On Tuesday, more stocks gained ground within the S&P 500 than fell, but tech companies overpowered gains elsewhere.
Micron Technology slumped 13.2 per cent and Nvidia fell 4.1 per cent. Samsung Electronics slumped 12.3 per cent in South Korea.
SpaceX wavered in early trading then closed 1 per cent higher. The space exploration and artificial intelligence company had a soaring market debut less than two weeks ago. The company plans to raise money through a bond offering, partly to fund AI development.
The growing likelihood of interest rate hikes later this year has helped deflate the massive run-up in AI-related stocks in recent days as traders worry that the higher rates could hamper economic growth.
Those Big Tech gains have been significant, sending major indexes on record-setting runs throughout 2026. Within the S&P 500, the tech sector alone is up 25.5 per cent just over the last three months and 16.6 per cent for the year.
AAP with AP, Reuters
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