Source : the age
The Australian sharemarket recovered from an early slump and closed flat for the second day in a row as investors shrugged off uncertainty about the state of US-Iran peace talks to join Wall Street’s AI-fuelled tech exuberance.
Northern Star Resources shares soared after high-profile US hedge fund Elliott Investment Management said it had built a more than $1 billion stake in the gold miner and suggested the miner put itself up for sale after months of underperformance despite the gold rally.
The S&P/ASX 200 finished the session down five points, or less than 0.1 per cent, at 8724.40, following a flat session on Monday. Banks and property trusts led the declines, while miners and IT stocks rallied. The Australian dollar rose 0.2 per cent to US71.75¢.
“Ceasefire negotiations between the US and Iran have seen repeated false starts since April, and today’s lack of progress is no exception,” said Fabien Yip, a market analyst at IG in Sydney. “The market has grown accustomed to the back-and-forth.”
The key financial sector, which makes up more than a third of the ASX, led losses in early trade, but clawed back a lot of those as the session went on. Still, all big four banks closed lower, with CBA down 0.2 per cent, Westpac down 1.6 per cent, National Australia Bank down 0.9 per cent and ANZ Bank down 3 per cent.
Real estate investment trusts were also lower as bond yields rose, making government bonds look more attractive. Shopping centre landlords Scentre, Vicinity and Stockland had some of the sector’s biggest losses, finishing down 2.4 per cent, 4 per cent and 4.3 per cent, respectively. Data centre operator Goodman Group slipped 0.4 per cent.
Consumer-related stocks struggled, with Kmart and Bunnings owner Wesfarmers down 0.8 per cent, electronics retailer JB Hi-Fi losing 5.4 per cent, and furniture seller Harvey Norman down 2 per cent, while supermarket giants Woolworths and Coles dropped 1.9 per cent and 0.7 per cent. The latest ANZ-Roy Morgan consumer confidence report, published before the market opened, showed Australian consumer confidence rose 2.7 points last week, its highest level since March, but is still down 17.5 per cent on its 2025 average. “Recent momentum in consumer demand has been soft,” said ANZ economist Sophia Angala.
Retailers were also affected by prospects of higher wage bills after the Fair Work Commission this morning lifted minimum and award wages by 4.75 per cent from July this year, giving millions of Australians a pay rise aimed at compensating them for price pressures over the past year.
The fuel-price-sensitive airlines also wobbled, with Qantas falling 2 per cent and Virgin Australia slumping 3.7 per cent.
However, the losses on the ASX were mostly offset by a rally in tech stocks and gains in mining and energy shares.
Miners were pushed higher by Northern Star’s 13.6 per cent rally following the disclosure by Elliott Management. The activist investor, led by billionaire Paul Singer, said that while Northern Star has “world-class” gold mining assets it has underperformed due to operational missteps, cost overruns and inconsistent strategic direction. The US hedge fund is urging the miner to conduct a strategic review, including options of a sale, while conducting an external search for a new CEO.
“We believe there would be significant strategic interest in Northern Star,” Elliott said in a presentation. Stuart Tonkin, who has been CEO since 2016, will step down in the coming months, the company announced in May.
Meanwhile, iron ore and copper heavyweights BHP and Rio Tinto rose 1.4 per cent and 1.5 per cent, helped by a rise in copper prices. Northern Star’s rival Evolution Mining slipped 0.2 per cent, and Newmont added 1.2 per cent.
Energy stocks were mixed as oil prices ticked lower after their surge on Monday. Oil and gas giant Woodside was up 1.8 per cent, while Santos dropped 0.6 per cent. Brent for August delivery traded near $US94 a barrel after adding 4.2 per cent in the previous session, while West Texas Intermediate was around $US91. Prices surged Monday on a report that Tehran was halting talks with Washington in protest against Israel’s attacks in Lebanon, before paring gains after US President Donald Trump said the negotiations were continuing.
The US leader said a memorandum of understanding with Iran to reopen the Strait of Hormuz could happen over the next week, according to a telephone conversation he had with ABC News. Washington still had “to get a few more points” before a deal, he said.
Tech stocks were the biggest gainers of the day, soaring after big tech stocks shot higher on Wall Street thanks to exuberance around artificial intelligence. Xero, the biggest tech stock in Australia, jumped 7.5 per cent, while fellow software makers WiseTech Global and Technology One surged 7.9 per cent and 3.3 per cent, respectively. Family tracking app Life360 rallied 13.3 per cent.
On Wall Street overnight, the S&P 500 added 0.3 per cent to its prior all-time high. The Dow Jones rose 0.1 per cent, and the Nasdaq composite gained 0.4 per cent, both also adding to their previous records set last week as strong profit reports from US companies and continued strength for big technology stocks kept momentum going.
with AP, Bloomberg, Reuters
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