The Australian sharemarket opened lower on Thursday, despite Wall Street lifting from profits piling from Netflix and other big technology stocks.
The Australian sharemarket opened lower on Thursday, despite Wall Street lifting from profits piling from Netflix and other big technology stocks.
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By Cindy Yin
Updated January 23, 2025 — 10.16amfirst published at 5.12am
The Australian sharemarket opened lower on Thursday morning as commodity prices continue to weaken, despite strong leads from Wall Street overnight buoyed by technology stocks.
The S&P/ASX200 dropped 15.8 points, or 0.2 per cent, to 8,414 points as at 10.22 am AEDT, with six of the 11 industry sectors retreating. It comes after the ASX recorded marginal gains of 0.3 per cent on Wednesday.
The Australian dollar saw marginal losses, and was valued at 62.7 US cents as at 10.24am.
The slump in mining shares continued, with the sector down 0.9 per cent in early trade. BHP and Rio Tinto dropped by 1.1 per cent and 0.8 per cent respectively, while Fortescue was down by 0.8 per cent as the iron ore heavyweight reported higher than anticipated quarterly results to investors. Thursday morning’s biggest laggard on the market was gold mining company Evolution Mining, slipping 2.6 per cent.
The federal government today announced it will acquire $50 million of debt from Rex, making it the embattled regional airline’s biggest creditor. This comes after the company was placed into voluntary administration in July last year.
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“This makes clear the Government’s ongoing commitment to maintaining access to aviation services for regional and remote communities, and recognises the critical role of the Rex network to local economies,” a joint statement between Finance Minister Katy Gallagher and Transport Minister Catherine King said.
Real estate was the worst-performing sector, dropping to 1.55 per cent, affected by industrial property giant Goodman Group slipping 2.1 per cent.
Information technology was the biggest lifter for the second day running, bolstered by WiseTech Global rising by 0.4 per cent, while accounting software company Xero (up 1.7 per cent) and TechnologyOne (up 9.4 per cent) also rose.
Myer shares rose 1.9 per cent as shareholders gear up to vote on the proposed merger with Premier Investments’ portfolio of fashion brands comprising Just Jeans, Jay Jays, Portmans, Dotti and Jacqui E. Proxy votes released before the 9am meeting today showed 95 per cent of shareholders have cast votes in favour of the deal. Premier shares slipped 0.4 per cent.
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All four big banks were in the red, as CBA recorded drops of 0.7 per cent, while Westpac (down 0.4 per cent), ANZ (down 0.5 per cent), and NAB (down 0.3 per cent) similarly lagged.
In the US, Netflix, Oracle and other big technology stocks lifted Wall Street as their profits pile higher and excitement builds around the moneymaking prospects of artificial intelligence.
The S&P 500 rose 0.6 per cent and came close to its all-time closing high set early last month. The Dow Jones added 130 points, or 0.3 per cent, and the Nasdaq composite climbed 1.3 per cent.
The gains came even though most US stocks fell under the weight of another crank higher for Treasury yields in the bond market. The smaller stocks in the Russell 2000 index lost 0.6 per cent, for example, and roughly two out of every three stocks in the S&P 500 sank. Gains for big, influential stocks were more than enough to make up for it.
Netflix helped lead the way after it said live events like football games and a Mike Tyson-Jake Paul fight helped it add nearly 19 million subscribers during the latest quarter. It also reported stronger profit than analysts expected and said it’s raising subscription prices in the United States and other countries. Netflix jumped 9.7 per cent.
The streaming giant joined a lengthening list of companies that have topped analysts’ profit expectations for the end of 2024. Such results support their stock prices and counteract the downward push they’ve felt from rising Treasury yields, which can peel investors away from stocks.
The rise in yields, caused in part by worries about stubborn inflation and the US government’s swelling debt, had knocked down stocks and halted the record-breaking run that had carried them through 2024, at least briefly.
Some of the market’s most forceful pushes upward came from AI-related companies. Oracle added 6.8 per cent following its 7.2 per cent rise the day before, ahead of the expected announcement that came late Tuesday about Stargate, a joint venture the White House said will start building out data centres and the electricity generation needed for the further development of AI in Texas.
The partnership formed by Oracle, OpenAI and SoftBank will invest up to $US500 billion ($797.4 billion). SoftBank Group’s stock in Tokyo rose 10.6 per cent.
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Other AI-related stocks also climbed, furthering their already fantastic run. Nvidia, the company whose chips are powering much of the move into AI, rose 4.4 per cent. Its stock is above $US147 after sitting below $US18 just two years ago.
In the bond market, the 10-year Treasury yield rose to 4.60 per cent from 4.57 per cent late Tuesday. It had largely been regressing since an encouraging update on inflation last week, but it’s still well above where it was in September, when it was below 3.65 per cent.
In the cryptocurrency market, where prices have surged on hopes President Donald Trump will make Washington friendlier to the industry, bitcoin was sitting just above $US104,000. It had set a record above $US109,000 on Monday.
Some sourness is lingering after Trump and his wife launched meme coins, which critics said looked like an unseemly cash grab.
With AP
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