Aussie Stocks Retreat to 5-Month Lows

Australian shares eased 27 points, or 0.3%, to 8,950 on the first trading day of August, reversing the prior session’s gain as investors turned cautious ahead of key domestic releases this week, including June household spending, trade data, and July job ads. Focus also extends to top trading partner China, where PMI readings from a private survey and trade figures are due this week. Firmer U.S. equity futures tempered losses after President Trump signaled restraint on further Iran strikes, raising hopes for progress in the five-month conflict. Locally, factory activity in July was revised upward amid easing inflation, while June private credit posted its strongest rise in six months. Energy minerals, consumer services, and healthcare weighed, though utilities and consumer non-durables offered support. Three of the four major banks slipped, while energy names Woodside (-1.5%) and Santos (-1.4%) retreated. In contrast, Wisetech (1.3%), Evolution Mining (1.2%), and QBE (0.7%) advanced.

The ASX 200 closed slightly firmer at 8,978 on Friday, clawing back losses from the prior session as strength in tech, non-energy minerals, and utilities offset broader caution. Sentiment was lifted by a rally in U.S. stock futures after Amazon’s upbeat earnings and a rebound in chip stocks on Wall Street Thursday. Gains, however, were capped by weaker factory activity in China, with July’s official PMI underscoring slowing demand from Australia’s key trading partner. Miners gained on higher copper prices, lifting Rio Tinto (1.0%) and South32 (0.8%), while gold producers Evolution Mining (1.8%) also advanced. However, the big four banks fell between 0.1% and 0.4%. Still, Australian equities booked their first weekly gain in a month, up 2.3%, and a fourth straight monthly rise, supported by robust private credit growth in June. Inflation worries also eased after softer June and Q2 readings, reinforcing views that the central bank’s three rate hikes this year are beginning to bite.

Australian shares advanced 34 points, or 0.4%, to 9,001 in early Friday trade, rebounding from the prior session’s weakness after Wall Street rallied overnight, as heavyweight chipmakers surged on renewed bets the AI-driven bull run still has legs. Gains were led by tech, non-energy minerals, industrial services, and utilities, though healthcare and consumer non-durables weighed. However, gains were capped by lingering caution over whether three rate hikes this year from the Reserve Bank will prove sufficient, with their full impact yet to filter through the economy. Standouts included BHP Group (2.4%), Lynas Rare Earths (4.7%), and Sandfire Resources (3.2%), while the big four banks added between 0.1% and 0.6%. Local markets are on track for weekly gains of more than 2%, reversing three straight weekly declines and setting up a fourth monthly rise. Momentum has been underpinned by easing inflation concerns and signs of resilience in manufacturing and services activity through July.