ASX 200 Drops 1% at Close

The ASX 200 fell 100 points, or 1.1%, to finish at 8,686 on Thursday, shifting from gains in the prior session and retreating from a one-month peak as profit-taking set in. Meanwhile, geopolitical tensions in the Middle East resurfaced after Tehran struck Kuwait’s airport, and U.S. forces hit targets near the Strait of Hormuz. Locally, the Reserve Bank of Australia signaled vigilance as headline inflation held at 4.2% in April, above its 2–3% band, and Q1 GDP growth slowed sharply. Still, losses were cushioned by April trade data showing Australia returned to surplus, driven by a rebound in exports and weaker imports. Commercial services, non-energy minerals, and manufacturing drove the losses. BHP and Rio Tinto shed 3.2% and 3.7%, their weakest since mid-May after record highs a day earlier. Tech names tracked Nasdaq weakness, with WiseTech down 5% and Xero off 3%. However, energy stocks bucked the trend as oil prices rose, lifting Woodside Energy (0.3%) and Santos (0.8%).

Australian stocks slipped 110 points, or 1.3%, to 8,675 in Thursday's morning session, reversing gains from the prior session after losses on Wall Street overnight amid renewed tensions in the Middle East. Iran reportedly launched a drone attack on Kuwait Airport following a skirmish with the U.S. Local markets retreated from a one-month high, with traders cautiously anticipating April trade data later today. In March, Australia saw the first trade gap since December 2017, as exports fell while imports jumped to a record high. Most sectors logged steep losses, with commercial services, non-energy minerals, and producer manufacturing among major laggards. Still, strength in consumer non-durables and energy minerals helped limit further losses. The four big banks dipped between 1.2% and 1.5%. Other notable decliners were mining giant BHP Group (-3.3%), Northern Star Resources (-5.6%), Lynas Rare Earths (-5.4%), and Evolution Mining (-3.9%).

Australia's ASX 200 rose 61 points, or 0.7%, to close at 8,786 on Wednesday, recovering from subdued trade in the prior two sessions and reaching its highest level in a month. Meantime, a weaker Q1 GDP print reinforced views that the central bank may pause further policy tightening after delivering three rate hikes so far this year amid persistent inflation pressures. Gains were led by producer manufacturing, non-energy minerals, and process industries, which more than offset weakness in consumer, healthcare, and commercial services stocks. BHP Group jumped 2.5% to a record high as copper and iron ore prices increased. Rio Tinto gained 1.9%, also reaching a fresh peak. Northern Star Resources surged 4% after Morningstar highlighted the possibility of a sale of the gold miner. Fuel retailer Ampol added over 2% after Australia's competition regulator approved its acquisition of EG Australia. Financial stocks also advanced, with the four major banks posting gains of between 1.0% and 1.7%.