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Highlights
- Australian sharemarket edges lower following Wall Street volatility
- Materials, energy, and financials weigh on benchmark index
- Tech stocks buoyed by strong US earnings
The Australian sharemarket opened on a softer note on Thursday, reflecting the nervous undertone on Wall Street after fresh economic data rekindled concerns about a potential slowdown in the US economy. The benchmark ASX200 index dipped 9.5 points or 0.12% to 8,116.70 in the first 20 minutes of trade, with major sectors such as materials, energy, and financials pulling the index lower.
Commodity Giants Weigh on the Index
The heavyweight mining sector came under pressure as key players saw selling interest. Shares of BHP Group (ASX:BHP) declined by 0.7%, while Rio Tinto (ASX:RIO) and Fortescue Metals Group (ASX:FMG) posted steeper falls of up to 2.2%. The downside came amid continued weakness in global commodity markets, particularly a pullback in iron ore prices, which dented investor sentiment across the sector.
Energy Sector Struggles on Oil Slide
Energy stocks also contributed to the broader market softness. A sustained retreat in crude oil prices saw major players like Woodside Energy Group (ASX:WDS) and Santos (ASX:STO) trade more than 1% lower in early trade. The pressure on energy names reflects ongoing concerns around global demand and oversupply risks.
Banks Join Broader Retreat
Financial stocks mirrored the cautious market tone. All of the Big Four banks were trading in the red, further dragging the index. The broader risk-off mood and pressure on bond yields amid global growth concerns weighed on the sector’s outlook.
Tech Stocks Find Bright Spot in Global Cues
In contrast to the weakness in traditional sectors, the local tech space showed resilience, supported by robust quarterly earnings reports from US tech majors overnight. Strong results from Microsoft and Meta Platforms helped boost confidence in the technology space. As a result, leading Australian tech firm Xero Limited (ASX:XRO) witnessed early buying interest, aligning with broader investor optimism in high-growth sectors.
Global Recession Concerns Cast Shadow
Market sentiment turned cautious after US economic data revealed a contraction in GDP for the March quarter — marking the first such decline in three years. While Wall Street experienced sharp intraday declines of up to 2%, a late-session rebound helped mitigate losses. Nevertheless, the data raised alarms about the resilience of the global economy, influencing investor behaviour in markets like Australia.
As market participants look ahead, focus may shift toward resilient ASX dividend stocks and defensive sectors amid growing macroeconomic uncertainty.
