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The Australian sharemarket rebounded today as investors took a brief pause from recent heavy selling, driven by concerns of a potential US recession.
As of 2:02 pm AEST, the benchmark S&P/ASX 200 Index increased by 0.4%, or 31.2 points, reaching 7680.6. This follows a drop earlier in the session when the index was down 0.2% at the start of trade. The positive movement came as six out of the eleven sectors posted gains.
Global Market Reactions
Japanese equities saw a strong recovery from the previous day’s global market downturn, which had seen significant losses in markets from New York to London. US equity futures also advanced in early Asia trading. SPI Asset Management’s Stephen Innes noted that while the situation remains uncertain, the robust US services data offered some optimism amidst ongoing recession concerns.
On the previous day, the S&P/ASX 200 Index experienced its most significant drop since the COVID-19 market turmoil in 2020, falling 293.6 points, or 3.7%, to 7649.6. This decline was fueled by worries that the US Federal Reserve had not acted swiftly enough to mitigate a severe economic downturn.
In New York, the S&P 500 fell by 3% to 5186.48, the tech-heavy Nasdaq dropped 3.4%, and the Dow Jones lost 1033 points, or 2.6%. The VIX, Wall Street’s “fear gauge,” saw its largest spike since 1990.
Commodities and Cryptocurrency Movements
Commodity prices also took a hit, with copper, gold, and crude oil experiencing declines due to a dimmed economic outlook. On the ASX energy stocks dropped by 1.7%, with Woodside Petroleum Ltd (ASX:WPL) leading the decline, falling 4.7%.
Copper settled 1.8% lower in London, after dropping as much as 3.8%, while aluminium prices also fell. Oil prices rebounded slightly, with Brent crude climbing towards $US78 a barrel after previously falling more than 5% over several sessions.
Cryptocurrencies also faced pressure, with Bitcoin falling 9.5% to $US53,801, and briefly dipping below $US50,000.
Stocks in Focus
- Coronado Global Resources Ltd (ASX:CRN): Shares fell 0.8% following a report of a 10% decline in revenue to $1342 million for the half-year. The company reported a net income of $16.2 million and adjusted EBITDA of $135.4 million.
- Treasury Wine Estates Ltd (ASX:TWE): Shares rose 0.7% after the company announced plans to review its portfolio of lower-priced wine brands as part of a strategic reset.
- Audinate Group Ltd (ASX:AD8): Shares plummeted 35.4% after the company issued a softer-than-expected FY25 outlook, leading to a significant consensus downgrade and marking it as the worst performer in the ASX 200.
Investors will closely watch the Reserve Bank’s policy decision at 2:30 pm AEST, with expectations leaning towards the central bank maintaining current interest rates.
