Stocks in Australia Hit 10-week Low

Australian shares edged up in early Thursday trade, with the benchmark ASX 200 hovering near 8,850 to mark a second day of gains. Firmer U.S. equity futures lifted sentiment after Wall Street closed higher overnight amid easing inflation signals and a strong start to the Q2 earnings season. Locally, Treasurer Jim Chalmers pressed regulators to adopt a more pro-growth stance to lift productivity. In Asia, China’s weakest annual GDP growth since 2022 in Q2 raised expectations of fresh stimulus, as officials noted that external risks remain elevated and demand trails supply. Utilities, healthcare, and consumer services led gains, partly tempered by weakness in consumer durables, electronic tech, and non-energy minerals. The big four banks rose between 0.2% and 1.0%, with notable gains in Seek (1.9%), ASX (1.4%), and TPG Telecom (0.7%). Traders now await inflation expectations data from the Melbourne Institute, alongside U.S. retail sales and jobless claims, for further economic cues.

The ASX 200 advanced 33 points, or 0.4%, to end at 8,841 on Wednesday, its strongest finish in a week after two muted sessions. Sentiment improved as softer-than-expected U.S. inflation data eased pressure for imminent rate hikes. Meanwhile, China’s weakest annual GDP growth since 2022 in Q2 raised expectations of fresh stimulus in Australia's main trading partner, as officials cautioned that external risks remain high and demand lags supply. However, gains were capped by vigilance ahead of domestic labor market data next week. Electronic tech, commercial services, and producer manufacturing drove the gains, offset by declines in logistics, healthcare, and consumer non-durables. Heavyweights stood out: BHP rallied 3.4% ahead of Thursday’s production update, Rio Tinto rose 1.2% after topping iron ore sales forecasts, and Macquarie climbed 1.6% to a record high. In contrast, energy stocks retreated, with Woodside Energy down 1%, Santos off 0.7%, and Whitehaven Coal slipping 0.3%.

Australian shares rose 40 points, or 0.5%, to 8,848 in Wednesday morning trade, snapping a two-day lull and touching their highest level in a week. The rebound tracked firmer U.S. futures after semiconductor stocks rallied overnight, while cooler-than-expected U.S. inflation sharply reduced odds of a July rate hike. Local sentiment also improved, with July consumer sentiment and June business mood recovering as geopolitical tensions eased. Gains, however, were capped by caution ahead of the Q2 GDP release from the main trading partner China, later today, with markets bracing for signs of slowing economic activity. Electronic tech led the advance alongside non-energy minerals, industrial services, and commercial services. Three of the big four banks posted modest rises, while heavyweight BHP Group surged nearly 4% on optimism over Chinese infrastructure demand. Other notable movers included Megaport (3.7%), Challenger Ltd. (2.6%), and Capricorn Metals (2.0%).