ASX Dips as Investors Eye EU-US Trade Deal, Macquarie Leads Financial Sector Lower
Sydney, Australia – The Australian sharemarket experienced a downturn today, wiht the S&P/ASX 200 Index shedding 26.40 points, or 0.3 per cent, to close at 8710.8. Investors adopted a cautious stance, taking profits after a robust previous session and closely monitoring developments in a potential trade agreement between the European Union and the United States.Seven out of eleven sectors traded in the red, with financials bearing the brunt of the decline. This sentiment follows a mixed performance on Wall Street, where tech giants Alphabet and Tesla released their latest earnings reports after the market close.
As the August 1 tariff deadline between the US and the EU looms, reports indicate that a deal is within reach, with a 15 per cent tariff being a central point of negotiation. This proposed tariff level mirrors an agreement previously struck between the US and Japan, potentially signaling a de-escalation of global trade tensions that have substantially influenced market dynamics throughout the year.
In US trading, Alphabet’s stock saw an uptick in after-hours activity, buoyed by earnings that surpassed expectations. The technology behemoth also announced an increase in its 2025 capital expenditure budget by $US10 billion ($15 billion), driven by escalating demand for its cloud products and services. Conversely, Tesla’s shares experienced a decline of over 5 per cent in extended trading following the company’s conference call, during which it confirmed a significant drop in sales for the past quarter. The electric vehicle manufacturer also disclosed the commencement of initial production for a more affordable EV model.
On the domestic front, financial stocks exerted downward pressure on the ASX. Macquarie Group’s shares fell by 4 per cent after the bank announced the departure of its long-serving Chief Financial Officer, alex Harvey. The bank is also anticipating a protest vote on its remuneration report at its upcoming Annual general Meeting,a outcome of recent regulatory and compliance issues.
Gold miners also found themselves in negative territory as the price of the precious metal eased to approximately $US3447 per ounce, down by about $7 from Wednesday’s trading. This softening in gold prices is attributed to the perceived easing of global trade tensions. Evolution Mining retreated 3.2 per cent, and Regis Resources saw a 3.7 per cent drop. Northern Star announced the discontinuation of its forward hedging policy to capitalize on the soaring gold price, while acknowledging that operational challenges at its Super Pit mine in kalgoorlie would constrain production.The company’s shares closed down 2 per cent.
In contrast,healthcare stocks demonstrated resilience,with CSL rising 1.3 per cent. resmed, scheduled to release its results next week, and Cochlear both gained 0.5 per cent. CSL has now seen a notable rally of 15 per cent as June 27. Darren Thompson, Chief Investment Officer at Equity Trustees Asset management, commented, “Healthcare stocks have lagged broader markets and may be poised for a rebound, especially as pricing pressures and regulatory noise begin to clear.”
Stocks in Focus:
Bapcor experienced a significant decline of 28 per cent after reporting weaker-than-expected trading for May and June. The automotive parts group also announced $50 million in post-tax writedowns and the departure of three directors.
Fortescue shares climbed 3.4 per cent following the announcement of a record iron ore shipment volume for the year ending June. The company forecasts stronger growth in the next 12 months with falling production costs, despite ongoing challenges at its Iron Bridge project.
Lynas Rare Earths gained 3.4 per cent after signing a memorandum of understanding with Korean permanent magnet manufacturer JS Link for a potential manufacturing and supply partnership.
Karoon Energy shares fell 3.1 per cent after reporting a 24.9 per cent year-on-year decrease in its net profit.
