- 01ASX 200 fell 0.5%, outperforming Wall Street’s sharp sell-off.
- 02Banks, Telstra and supermarkets cushioned losses.
- 03Miners slid 2.5%; local tech was mixed, with NextDC up 5.6%.
After a long period in which Australia’s lack of a technology sector has been a performance anchor, it proved to be a blessing that saved us from the worst of the Wall Street AI crunch.
After the most brutal sell-off on Wall Street since the Liberation Day tariffs were announced, the Australian market initially tumbled by 1.5% but recovered to end Friday down 44.3 points, or 0.5%, to 9,020.8 points.
That is quite a resilient result after the S&P 500 fell by 4.4% and the tech-heavy Nasdaq by 6.4% as investors worried about AI regulation wiped a record $3.3 trillion off market value just one day after the Democrats swept to control of both houses in the US at the mid-term elections.
Defensive stocks help our market
The Australian market was helped by having plenty of defensive stocks, with shares in the banks, Telstra and the supermarket giants helping to reduce the impact.
It obviously wasn’t all good news with the Australian mining sector getting hammered, down 2.5% with majors like BHP (ASX: BHP) and Rio Tinto (ASX: RIO) both falling around 2% as copper exposure remained Australia’s best proxy for weak AI sentiment.
Shares in US-exposed titanium and critical minerals company IperionX (ASX: IPX) plummeted 8.7% to $2.
Local tech on a roller coaster
Local tech stocks were on a roller coaster, falling as much as 2.2% early but recovering later to be just 0.8% lower.
Some sector falls included TechnologyOne (ASX: TNE), down 1.5% to $32.65 and Codan (ASX: CDE) down 2.9% to $54.49.
Shares in data centre developer Goodman Group (ASX: GMG) fell 3.2% to $27.84 as barriers to developing data centres continued to grow.
Shares in NextDC (ASX: NXT), meanwhile, gained another 5.6% to $10.40 after opportunistic share raids by investors including Goodman.
Australia’s plentiful supply of defensive opportunities helped the market to recover with the big banks rising, led by a 1.1% rise for Westpac (ASX: WBC) to $37.03 and a 2.7% rise for National Australia Bank (ASX: NAB) to $40.
Also adding some green to counteract the losses were shares in Telstra (ASX: TLS), which rose 1.4% to $5.10 while the supermarket giants Coles (ASX: COL) and Woolworths (ASX: WOW) both rallied almost 2%.
Macquarie weakens after beating forecasts
While Macquarie (ASX: MQG) beat forecasts with a half-year net profit of $2.48 billion, its shares fell 3.7% to $248.86 after news that the Australian Prudential Regulation Authority said the company miscalculated the amount of capital required to support risks within its non-bank operations and imposed a $100 million penalty for breaching capital requirements.
Shares in Mayne Pharma (ASX: MYX) rallied 13.7% to $3.08 after it agreed to sell its Adelaide plant in a $55.5 million deal with Evaris Pharma.
The move to get rid of Mayne Pharma International, which houses the Salisbury facility in South Australia, brings to an end four decades of Australian manufacturing and leaves the group as a specialty pharmaceutical company focused entirely on the United States.
Shares in James Hardie (ASX: JHX) dived 6.2% to $39.20 after noting that it was finding the construction segment of the US housing market particularly challenging.
Shares in Citigold (ASX: CTO) plummeted 17.7% to 1.4¢ after the failure of an attempted boardroom coup by Tony Sage.
Shares in Nine Entertainment (ASX: NEC) jumped 11.6% to 81.5¢ after it maintained guidance but shareholders still hit the company with a first strike on executive pay at its annual general meeting.
Shares in News Corp (ASX: NWS) fell 9.3% to close at $43.07.
The week ahead
Following a week dominated by the Reserve Bank’s fifth interest rate rise, this week promises to be quieter with international reaction to the Democrats’ blue wave in the US set to dominate.
In the immediate aftermath of the result there are questions about who will wear the blame in President Trump’s team and whether Trump will try to rush through any measures such as a new Supreme Court appointment before the new Democratic members of Congress and the Senate take their seats.
Here in Australia, RBA Assistant Governor (Economics) Sarah Hunter and RBA Monetary Policy Board member Marnie Baker are due to give public speeches which might provide some more clues about why opinion was split over the latest interest rate rise.
Otherwise, we can look forward to the Westpac Consumer Sentiment release, business surveys and dwelling finance approvals.
Offshore, the big news in China centres on inflation, the trade balance and new loan figures, while economic growth figures and trade numbers are due in Europe.
In the United States, there are inflation figures, small business optimism and inflation expectations to look out for, although the ongoing political power struggle will also play a big part in market moves.
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The ASX small-cap stories that matter, filed before 9am AEST. Curated by the Small Caps desk.