ASX 200 Slips 1.3% at Close

The S&P/ASX 200 dipped 108 points, or 1.3%, to finish at 8,497 on Wednesday, erasing prior gains as U.S. equity futures retreated amid renewed Middle East tensions and inflation worries. Local caution deepened after the central bank projected underlying inflation above 3% until late 2027, easing to the midpoint only by mid-2028. Still, losses were tempered by China's decision to hold key lending rates at record lows for a 12th straight month, with policymakers pledging “supportive” and “moderately loose” settings after Q1 GDP grew 5%, hitting the top of the government’s 4.5–5% target. Sector weakness was broad, led by non-energy minerals, transport, financials, and process industries. Among notable laggards were Evolution Mining (-5.2%), Brambles Ltd. (-4.8%), REA Group (-2.2%), and Origin Energy (-2.0%). The four big banks dropped between 0.7% to 2.5%. Traders now brace for Australia's PMI readings for May and April job data, set to be released on Thursday.

Australian equities slid 43 points or 0.5% to 8,563 in early deals on Wednesday, reversing strength in the prior session as U.S. stock futures fell amid elevated bond yields and renewed geopolitical tensions in the Middle East. Sentiment also turned cautious after the Reserve Bank’s May meeting minutes suggested underlying inflation in Australia is likely to remain above 3% until late 2027, underscoring persistent domestic cost pressures. Still, losses were partly limited by an improvement in consumer sentiment in May, with the index rebounding from April’s 2-1/2-year low. Mining and technology-related shares led the decline, particularly non-energy minerals, process industries, and electronic technology stocks, while retail trade and energy miners provided some support. The four major banks traded lower, falling between 0.4% and 1.1%. Among notable decliners were heavyweight BHP Group (-2.2%), Evolution Mining (-3.6%), Northern Star Resources (-2.4%), and South32 Ltd. (-2.0%).

The S&P/ASX 200 climbed 99 points or 1.2% to close at 8,605 on Tuesday, halting weakness in the prior two sessions, as bargain hunting emerged after markets hit a six-week low. Traders largely shrugged off a modest decline in U.S. stock futures, as they welcomed an improvement in consumer mood during May after April's 2-1/2-year low. However, strength was capped by the central bank's May minutes, which indicate underlying inflation in Australia will stay above 3% until late 2027, highlighting that persistent cost pressures had already been running before the Middle East conflict began. Almost all sectors gained, led by communications, logistics, and retail trade. Financials also rose solidly, following Australian government changes to investor tax concessions that could improve asset quality at the country's major lenders. The four big banks advanced between 0.9% to 1.9%. Other top performers were Woolworths Group (4.4%), SGH Ltd. (3.6%), Pro Medicus (3.3%), and QBE Insurance (3.1%).