Australian Shares Drop but Head for Second Weekly Gain

Australian equities fell 69 points or 0.8% to 8,996 in early trade on Friday, reversing a strong rally in the previous session that lifted the market to a near two-month high. Profit-taking followed an overnight Wall Street sell-off as investors accelerated their retreat from technology stocks amid growing concerns over a potential slowdown in data-center investment. Local technology stocks came under pressure, while mining and materials shares also declined. Among individual stocks, Sandfire Resources plunged 6.4%, followed by Sims Ltd. (-6%), Goodman Group (-4%), and South32 (-3.4%). Heavyweights BHP Group and Rio Tinto also fell 3.5% and 3.2%, respectively. In contrast, the four major banks advanced between 1.3% and 3.1%. Despite the pullback, the ASX 200 remained on track for a second consecutive weekly advance, up around 1%, supported by a solid September trade surplus, recovering personal spending, and steady private credit growth.

The ASX 200 surged 231 points or 2.6% to close at 9,065 on Thursday, reversing prior losses and reaching a two-month high. Sentiment improved following a Wall Street rally Wednesday after a Democratic sweep in the U.S. midterm elections boosted global risk appetite. Most sectors in Australian markets advanced, led by tech, non-energy minerals, and healthcare. Nextdc jumped 51% after saying stake-building by entities linked to Goodman Group and Digital Realty was opportunistic rather than a takeover bid. Mining giants BHP Group (6.2%) and Rio Tinto (7%) also rallied as copper and iron ore prices rebounded. Higher gold prices and a weaker U.S. dollar also lifted Northern Star Resources (9.9%) and Evolution Mining (14.2%). Further, Qantas Airways (6.2%) and Virgin Australia (11.2) advanced solidly, amid lower oil prices. Conversely, energy stocks slumped, with Woodside Energy falling 6.0% and Santos losing 5.4%. Three of the four major banks also declined, shedding between 0.6% and 5.4%.

Australian shares surged 177 points, or 2.0%, to 9,012 around midday Thursday, reversing prior losses and reaching a near two-month high. Overnight gains on Wall Street boosted sentiment amid Democrats’ midterm wins, easing oil prices, and lower U.S. Treasury yields. Locally, September trade surplus hit a seven-month high as exports notched a three-year high while imports fell. Wednesday data also pointed to a recovery in personal spending. Almost all major sectors advanced, led by non-energy minerals, tech, and commercial services. Mining giants BHP Group and Rio Tinto jumped 4.4% and near 5%, each. Gold miners also rallied on a stronger bullion price and a weaker U.S. dollar, with Evolution Mining up 10.8% and Northern Star Resources up 7.5%. Other notable gainers included Pro Medicus (9.9%), REA Group (8.9%), and Fortescue (6.0%). However, three of the four major banks fell 1.1%–6.2% after the Reserve Bank raised its cash rate for the fifth time this year earlier in the week.