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Highlights
- ASX200 slips slightly as IT sector weighs on index
- Lithium and resource stocks show upward momentum
- US data fuels rate cut expectations, impacting global markets
The ASX 200 index edged lower on Thursday, closing down 8 points or 0.10% at 8,550. Despite early strength, the local market slipped into negative territory amid modest trading volumes and weakness in key sectors like Information Technology, Real Estate, and Industrials.
The IT sector led declines, shedding 2.05%, primarily due to a sharp fall in shares of Xero Ltd (ASX:XRO). The stock tumbled 5.26% to A$184.00 after the company revealed a US$2.5 billion acquisition of Melio Payments, a US-based firm. While the acquisition positions Xero to grow its global software presence, the market responded cautiously due to concerns about valuation, cash flow impact, and integration of the loss-making firm.
Healthcare (+0.44%), Materials (+0.16%), and Energy (+0.13%) offered some support to the broader index. Notably, Iluka Resources (ASX:ILU) rose 6.88% to A$3.73, while Liontown Resources (ASX:LTR) and IGO Ltd (ASX:IGO) gained 2.94% and 1.78%, respectively. Pilbara Minerals (ASX:PLS) also climbed 5.62% to A$1.32, amid news of a major institutional investment, reinvigorating sentiment in the lithium space.
In the financial sector, movements were mixed. Australia and New Zealand Banking Group (ASX:ANZ) advanced 2.20% to A$29.74, helping lift the sector to new highs. Meanwhile, Commonwealth Bank (ASX:CBA) dipped 0.36% to A$190.71, showing signs of technical overextension. National Australia Bank (ASX:NAB) and Macquarie Group (ASX:MQG) both declined slightly.
Global Factors Shape Market Sentiment
Overseas, Wall Street posted gains as soft US economic indicators renewed expectations for interest rate cuts. While initial jobless claims fell to 236,000, continuing claims surged to 1.974 million, the highest in the current cycle. The US GDP for Q1 contracted by 0.5%, with weaker consumer spending and exports contributing to the downturn.
Currency markets responded with the US dollar slipping and the euro strengthening to US$1.1742. The Australian dollar firmed slightly to US65.45 cents. Bond yields dipped following speculation that political influences could reshape the Federal Reserve’s future leadership.
In Europe, stock indices closed higher, propelled by a rally in defence and mining names. The decision by NATO to boost defence expenditure helped fuel gains of over 3% in those segments.
Commodities and Small Caps Shine
Commodity performance was mixed. Copper surged 3.1% on supply concerns, and aluminium rose 0.5%. Gold held firm at US$3,348 per ounce, while iron ore saw marginal movement. Brent crude hovered at US$67.73 a barrel.
Small-cap stocks outperformed, with the ASX Small Ordinaries Index rising 0.46% to 3,227.10, reflecting broader investor interest outside the benchmark names.
Meanwhile, company-specific updates added to market buzz. Orthocell Ltd (ASX:OCC) marked a key milestone in the US regenerative medicine market with its first surgery using the Remplir™ nerve repair device. Alkane Resources (ASX:ALK) received approval for an upcoming transaction, and Sprintex Ltd (ASX:SIX) made strides in its European expansion efforts.
