Australian Shares Drop Further

Australian stocks fell 39 points, or 0.4%, to 9,170 in early trading on Thursday, extending losses from the prior session as U.S. equity futures edged lower after Wall Street ended mostly higher overnight amid a slight slowdown in U.S. July CPI data and strong earnings reports from chip shares. Local markets notched their lowest level in a week, with domestic inflation concerns remaining despite a slight easing in June, keeping investors cautious after the Reserve Bank held rates steady at 4.35% earlier this week but left the door open for further tightening following three hikes this year. Sector-wise, communications, consumer durables, retail, and transport weighed on sentiment, while industrial services and tech offered some support. Commonwealth Bank dropped more than 2%, contrasting with gains in the other three majors. Insurance Australia Group tumbled 5.5%, with Transurban (-2.7%), Telstra (-2.6%), and Scentre (-2.3%) also among notable laggards.

The ASX 200 fell 41 points, or 0.45%, to close at 9,209 on Wednesday, erasing the prior session’s modest gains as sharp losses in manufacturing, consumer non-durables, healthcare, and retail trade dragged the index to its weakest level in a week. Sentiment soured after the Reserve Bank of Australia held the cash rate steady at 4.35% on Tuesday but warned further tightening could follow if inflation lingers. Wall Street’s overnight slump added pressure, with escalating Middle East tensions and renewed attacks near key shipping routes stoking energy supply fears. Commonwealth Bank slipped 0.7% after reporting record annual cash earnings but flagged a sharp slowdown in mortgage demand post-tax changes. Rio Tinto eased 0.2% even as it secured government support to offset soaring energy costs. ASX tumbled 2.8% after a shareholder moved to file a Federal Court application against the bourse operator. Bucking the trend, AGL Energy surged 6.0% on stronger-than-expected 2027 earnings guidance.

Australian equities retreated Wednesday, with the benchmark slipping 40 points or 0.5% to 9,207 in morning trade, erasing the prior day’s modest uptick after Wall Street’s overnight weakness and stalled Strait of Hormuz talks lifted oil prices ahead of key inflation data. Locally, the Reserve Bank kept the cash rate steady at 4.35% after three hikes this year, stressing inflation remains uncomfortably high and expectations elevated. Sectoral weakness was led by tech services, manufacturing, consumer services, and retail, though consumer durables and logistics offered partial support. The four major banks eased between 0.1% and 0.7%, while notable laggards included BHP Group (-0.5%), South32 (-2.7%), Computershare (-2.0%), and Bluescope Steel (-1.8%). Market focus now shifts to testimony from Governor Michele Bullock before parliament on Friday, preceded by Assistant Governor Chris Kent’s appearance Thursday, as investors weigh policy signals against persistent inflationary pressures.