Australian Equities Extend Slide, Weekly Drop Looms

Australian shares slipped 37 points, or 0.4%, to 8,918 in early Friday trade, extending losses for a second session and heading toward the first weekly decline in four, down 0.5% so far. Sentiment continued to weaken on soft domestic data: April inflation expectations surged to a three-year high while employment in March grew the least in four months. Externally, risks of slower growth in top trading partner China amid Middle East tensions weighed, despite stronger-than-expected Q1 expansion. Still, losses were capped by firmer U.S. futures after President Donald Trump signaled the Iran war may end soon, with Israel and Lebanon agreeing to a 10-day ceasefire. Meanwhile, PM Anthony Albanese said a blaze at Viva Energy's oil refineries would not trigger any fuel restrictions in Australia. Retail, logistics, and financials led declines, with notable laggards from Cochlear (-2.2%), Ramelius Resources (-2.1%), and Perseus Mining (-1.6%). The big four banks fell between 0.3% and 1.1%.

The S&P/ASX 200 slipped 24 points, or 0.3%, to close at 8,955 on Thursday, reversing morning gains and a two-day advance as weakness in process industries, non-energy minerals, logistics, and financials weighed. Sentiment soured after April data showed inflation expectations in Australia jumped to their highest since November 2022, stoking cost-pressure concerns. Employment growth also slowed to a four-month low in March, driven by a drop in part-time jobs. Traders remained cautious after China’s Q1 2026 GDP beat forecasts, but face risks of softer growth if the Middle East crisis drags on. In the U.S., President Trump said the war with Iran was “close to over,” though Washington’s port blockade keeps supply-disruption risks elevated. Australia’s “big four” banks fell 1.3%–2.8%, while notable laggards included Reece Ltd. (-5.3%), Viva Energy (-4.5%), Evolution Mining (-4.2%), and Greatland Resources (-4.0%).

Australian equities edged 20 points higher, or 0.2%, to 8,999 in Thursday morning’s trade, extending gains for the third straight session after Wall Street’s S&P 500 and Nasdaq closed at record highs overnight on upbeat earnings and optimism over US-Iran talks. Investors awaited local releases later in the day, including April inflation expectations and March labor market figures. At the same time, focus turned to the upcoming Q1 GDP and March activity data in top trading partner China, which cover industrial output, retail sales, and unemployment. Gains were capped by recent remarks from Treasurer Jim Chalmers, who said Australians were “paying a hefty price for events on the other side of the world", referring to the Middle East conflict. Commercial services, healthcare, and consumer durables led the advance, though softness in process industries and logistics capped momentum. Early movers included Pro Medicus (7.5%), Technology One (5.8%), Xero Ltd. (6.9%), and REA Group (4.6%).