Australia Stocks Retreat from Over 7-Week High

Australian shares fell 70 points or 0.8% to 8,844 in early Tuesday trade, snapping a two-session rally as investors booked profits after the local market hit an over seven-week peak in the previous session. Sentiment also turned cautious ahead of key data releases later in the day from main trading partner China, including new home prices, industrial output, retail sales, and unemployment figures. In the U.S., equity futures drifted lower before the Federal Reserve’s first policy meeting under new chair Kevin Warsh, with a rate decision due Wednesday. Still, losses were partly contained by expectations that the Reserve Bank of Australia today would hold cash rates steady after three hikes since January. Sector weakness was broad, led by transport, retail trade, logistics, and financials. Notable laggards included Transurban Group (-3.6%), PLS Group (-2.6%), Sonic Healthcare (-2.4%), and Bluescope Steel (-1.3%), while the four major banks slipped between 0.6% and 1.8%.

The ASX 200 climbed 110 points or 1.3% to end at 8,914 on Monday, extending strength from the prior session and reaching its highest level in over seven weeks. A strong rally in U.S. stock futures boosted sentiment after Washington and Tehran agreed to an initial peace deal and reopen the Strait of Hormuz. Locally, traders anticipated the Reserve Bank of Australia's interest rate decision, due Tuesday, with a rate hold largely expected following a slew of weak domestic economic data and after three rate hikes since the start of the year. In main trading partner China, meanwhile, May activity data will also be due, including industrial output, retail sales, and the jobless rate. Gains were broad, led by non-energy minerals, industrial services, logistics, and financials. BHP jumped 3.6%, and Rio Tinto added 2.6%. Sigma Healthcare surged 6.4% after ending talks to buy the UK’s Boots. The big four banks rose between 1% and 3%. Energy lagged, with Woodside down 5.1% and Santos off 7.4%.

Australian equities surged 124 points, or 1.4%, to 8,928 in early Monday trade, building solid gains from the previous session and marking their highest level in over seven weeks. Sentiment was buoyed by a surge in U.S. stock futures after Washington and Tehran reached an interim peace deal, easing inflationary pressures and reducing the likelihood of further rate hikes. Locally, optimism mounted that the Reserve Bank will hold cash rates steady at Tuesday’s policy meeting following three increases earlier this year. However, caution set in ahead of China’s May activity data, with investors awaiting figures on industrial output, retail sales, and unemployment from Australia’s largest trading partner. Nearly all sectors advanced, led by non-energy minerals, industrial services, consumers, and financials. Standouts included BHP Group (3.5%), Evolution Mining (8.3%), Sigma Healthcare (7.6%), and Northern Star Resources (5.7%), while the four big banks rose between 0.9% and 2%.